Tata is currently selling the world’s cheapest car, the Nano. Tata wants to bring the car to America, where they say it will sell for between $7,000 and $8,000. So could Detroit build a $5,000 car, and profit from it?
I don’t see why not. Yes, there are books of laws governing the safety and mandatory minimum requirements that dictate what is a car, but America was once home of the car for every purse and purpose. Yet the cheapest offerings from any of the Big Three starts at around $12,000, and even if you include those automakers with a major factory presence in America (Toyota, Honda, Nissan) there isn’t a cheap car anywhere near the $7,000 range. The lowest cost vehicle for 2011 is the Nissan Versa base or the aging Hyundai Accent. There should be more though, and and they would be simple, cost effective automobiles for the masses.
The problem with new cars these days, as I see it, is that all too often the person with the money to plunk down on a brand new car either doesn’t have the knowledge or wherewithal to take care if it themselves. Most Americans don’t even change their own oil. So what this tells me is that people just aren’t as interested in cars as they used to be, even though they’re willing to shell out tens of thousands of dollars for the right to drive where they please. Why not simplify the whole process, and once your cheap car breaks, it breaks, and that’s it.
Think about a bare-bones, basic car from twenty years ago, compared to today. Even the basest of the base model cars come loaded with thousands of dollars in features that 20 years ago with high-price options, like power windows and anti-lock brakes (which, along with airbags, are not proven to actually reduce the risk of accident or injury.) So why not build a car with just the bare essentials? No ABS, just the two mandated airbags, a small radio (no CD player, just an MP3 dock), manual windows and locks, literally just the things you need in a car to make it a tolerable automobile. Yet it should still be stylish, easy to work on, and most of all, dead nuts reliable for a minimum of three years.
Why just three years? Well, after three years, you drive the car until it dies, and return it to the automaker, who can then recycle the parts for the next-generation. So the automaker is getting their parts back, and you’ve shelled out half as much money for 3 reliable years of transportation. And no headaches either; just change the oil two or three times a year, and once something breaks after the initial three years, you haul it back to the dealership where they take it, recycle it, and give you a small discount towards your next $5,000 car (or maybe an upgrade to the $6,000 model!)
Can America build a $5,000 and still turn a small profit? Probably not by a Detroit automaker, unless the cars are made in Mexico (where the $13,000 Fiesta is made.) So what is stopping the Japanese automakers? Maybe it really isn’t economically feasible. Maybe they can build one for $7,000 or $8,000 though. I’m not really a numbers guy. But if Tata thinks they can come over here and sell us a $7,000 Indian econobox and make money, I say America’s established automakers should rise to the challenge and undercut them with a superior product. Just ditch all the bells and whistles, sell it as cheap, basic transportation (with plenty of option boxes to check off) and watch bargain-hungry consumers flock to showrooms.
Maybe it’s a dream, but I’ve got to wonder if America isn’t slowly falling out of love with the automobile. When people are getting more excited about the next iPad than the next Camaro, I think that speaks volumes about where our priorities are. So buy a cheap car and be done with it.