Sunday, March 22, 2009

World's Cheapest Car Now Available--But You'll Have to Put Your Name in the Hat for the Privilege of Buying One

The world's cheapest car, the Tata "Nano," is being unveiled in Mumbai, India on Monday, March 23. Dubbed the "People's Car," the Nano is expected to make widespread automobile ownership possible in India for the first time.

But, for a while anyway, it looks like the quantity demanded will be larger than the quantity supplied at the announced price of a mere US$1,979. According to this article, the company expects to be able to supply a quantity of two or three cars for every 100 demanded. So the company will be resorting to an additional rationing tool besides price: a lottery system.

Some lament the additional negative externalities that will be created in the forms of air pollution and traffic congestion as more and more people begin purchasing and operating the cars. And these are serious negative consequences, to be sure. Nevertheless, it really is a remarkable success that a form of transportation so many of us take for granted is now attainable for many in India, too. Here is how Karishma Vaswani put it, in a wonderful article for the BBC:
This is a chance for millions of Indians . . . to participate in India's economic boom, and to get a chance to move up, and move on in life.

It is a chance to finally be a part of the great Indian dream.
Oh, and here is a video of the Nano:

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