Can India afford Tata’s 1 Lakh car?

About 2 years back, Mr Ratan Tata announced the ambitious dream of a Rs 1 Lakh car. He termed it as a compact people’s car which will revolutionize the car industry in India. The car is also said to be a rear-powered ( just like an auto rickshaw) and gear less. The car is in its prototypes phase is set to come out in 2008. The Maruti Udyog management thinks that rolling out a car at the 1 lakh price point is not feasible but lets not dwell too much on the cost because my concerns are towards the pollutions and the traffic congestion problem.

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