The 4 seater Nano, with an engine around 625cc, will have a dealer price of 100,000 rupees ($2,500), about half the cost of the cheapest car on today's market, a 25-year old model from Maruti Suzuki, Tata's great rival.
The Nano will go on sale later this year, the company said. "Let me assure you and our critics the car we have designed will meet all safety norms and all foreign environmental criteria," Chairman Ratan Tata said as he proudly unveiled what had been dubbed the "People's Car" at the Auto Expo in New Delhi.
The compact but curvy Nano stands in sharp contrast to the luxury Jaguar and Land Rover brands that Tata is negotiating to acquire from Ford Motor Co. Hundreds of people crowded into the pavilion to see the long awaited launch, standing on chairs to get the best view as Tata introduced and then drove the car onto the stage in a media circus more worthy of a pop concert or an Oscar ceremony.
Tata planned the car years ago as a safer and more affordable alternative for the millions who often ferry families of four, plus baggage, on motorbikes and scooters. New cars are preferable to buyers in India, where the absence of an organised market for second hand cars makes buying them a tedious and sometimes risky process.
Environmentalists are not so enthusiastic. They worry millions of the cheap cars will flood on to India's roads, many of which are already heavily congested, sending emissions levels sky high in Asia's third biggest economy.