World's cheapest car hits Indian streets

The world's cheapest car, the Tata Nano, hit the streets on Friday, as the first customer got the keys to a vehicle that its makers hope will transform travel for millions of Indians.

Ashok Raghunath Vichare took delivery of a lunar silver Nano LX model, one of three cars handed over in person by Tata Motors boss Ratan Tata at a city dealership.

The 59-year-old customs official from Mumbai said only that he was "very happy" to have got his hands on the car, as he was mobbed by cameras and press photographers.

His family, who accompanied him to the showroom, said their first drive would be to a nearby Hindu temple to have the vehicle blessed.

Mumbai bank worker Ashish Balakrishnan, who took delivery of a sunshine yellow LX model, said he could not wait to "joyride on the Bandra-Worli Sea-Link", a newly opened 5.6-kilometre (3.5-mile) bridge in the city.

"This is my first car. The price was a major factor," the 29-year-old told reporters.

The third car, also a lunar silver LX, was handed over to Kores India Ltd, an office products-to-outsourcing firm.

Analysts said the delivery was a positive step, after a land dispute forced the firm off the site of a factory it was building to produce the cars in eastern India, fuelling concerns about its ability to meet demand on time.

"I think it's very significant," the associate editor of trade magazine Autocar Professional, Darius Lam, told AFP.

"They have been talking about delivering this car since last year and subsequently due to the problems they have had with moving the factory they have had to delay it by at least one year.

"It really shows that now they are getting their production in hand and are able to start delivering."

Some 100,000 people were selected from a ballot to be the first recipients of the Nano, which reviewers have compared to the European Smart car and the classic "People's Car", the Volkswagen Beetle.

They include a roadside cobbler from Mumbai, who had been saving for seven years to buy a two-wheeler, but decided to wait and upgrade to four wheels on hearing that the vehicle would sell for just 100,000 rupees (2,055 dollars).

Others among the 203,000 people who placed orders was an 82-year-old former assistant commissioner of Mumbai police who used to ride a scooter and a market trader looking for an investment for his 12-year-old son.

India's first female photo-journalist, Homi Vyarawalla, who is now in her mid-90s, has also bid for a car. Ratan Tata launched the Nano in March, predicting the no-frills vehicle would revolutionise travel for millions of Indians, getting the growing middle-class, urban population off motorcycles and into safer, affordable cars. Three versions of the sporty, jellybean-shaped Nano went on sale in April: the basic model and more expensive CX and LX versions, which have extra features like air-conditioning, automatic windows and central locking.

The standard model sells for 140,000 rupees including tax in the showroom. The deluxe models cost up to 185,000 rupees.

Deliveries have begun to dealerships around the country from Tata Motors' Pantnagar factory in northern India, which can produce up to 50,000 Nanos every year. Tata Motors, part of the tea-to-steel Tata Group conglomerate, is India's top vehicle maker but like many firms in the automotive sector has been hit by the global economic slowdown which has cut demand for trucks and cars.

Last month it posted its first consolidated full-year net loss in eight years, partly blamed on a slump in sales at luxury British carmaker Jaguar Land Rover, which it bought from Ford last year.

- Mumbai, AFP