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Science/Tech See other Science/Tech Articles Title: The future of cars in America..... Cheap cars allow Indians to jump off motorcycles MUMBAI (AFP) - Trading a motorcycle for a car in India has long been too expensive for many, but manufacturers plan to offer models at 3,000 dollars or less to attract new buyers, analysts say. The push by Nissan Renault, Tata Motors and Global Automobiles -- a subsidiary of the Kolkata-based Xenitis group and China's Guangzhou Motors -- comes as car sales in India fell in April and May to a combined 1.52 million from 1.6 million a year earlier. It was the first back-to-back monthly decline in three years, a period of annual double-digit growth. But a new sales strategy is about to be unleashed. "TataÂ’s small car is likely to be the first one to roll out," said Ashutosh Goel, an auto analyst with brokerage Edelweiss Capital. "They have a firmed up model design and on-going plant construction." The much-awaited model could be priced between 100,000 to 125,000 rupees (2,457 to 3,017 dollars) and arrive by 2008 from its Singur plant in the communist-run state of West Bengal. "The management has indicated that a prototype of the small car is ready. It could be a four-seater with an engine capacity of 630cc," added Ajay Shethia, an analyst with brokerage firm Enam Securities. The Tata car is being pitched to first time-buyers eager to switch from motorcycles or scooters, which can cost from 30,000 to 80,000 rupees. Motorcycles have enjoyed record sales in the past five years in India as middle-class incomes have risen. But combined sales of two-wheelers, scooters and motorcycles fell more than eight percent in April-May from a year ago, as interest rates have risen in a bid to tame inflation. "Interest rates have been highest for commercial vehicles and car loans (from 8.5 percent in March 2006 to about 14.25 percent at present)," said Govindarajan Chellappa, an analyst with Credit Suisse Securities. "This has led to higher cash purchases for cars and two-wheelers," he said. India's creaking roads can barely handle its estimated seven million cars, but analysts say smaller vehicles, about two-thirds cheaper than similar models sold in Europe or the United States, will be snapped up. India's largest car company, Maruti Suzuki, pioneered the cheap car in India with its 800 model more than 20 years ago. The company still dominates the niche with cars as cheap as 240,000 rupees, but it faces stiff competition from Tata, South Korea's Hyundai Motors and others entering the market with aggressive plans. Demand for small cars is likely to be helped as they are better geared to meet lower emissions given their light weight, smaller engines and better fuel economy. Nissan Renault announced last week that it sees small car growth as attractive and wants to build a car in India with local partner Mahindra and Mahindra. "We are investigating how we can make a 3,000-dollar car. If we build a car like this, it will be in India," Carlos Ghosn, chief executive of Japan's Nissan Motors and France's Renault, told media in Yokohama. Japan's Toyota is also considering India as a small car hub by 2010, by expanding their dealership with Indian partner Kirloskar. Detroit auto giant General Motors last year announced plans for a new unit at Talegaon, near the western city of Pune, that will have annual production capacity of 140,000 small cars and "significant expansion as the market demands." Looking ahead, Credit Suisse's Chellappa said auto sales are expected to pickup as the economy grew 9.4 percent in the year ended March and is forecast to grow about 8.5 percent in 2007 by the central bank. "Assuming the economy remains strong, demand could rebound in the second half of this year," Chellappa said. And Suparna Maitra, head of corporate strategy of Xenitis, said their "people's car" would be priced around the same as the proposed Tata model. "It will be a no frills car. We will be able to see them on road by the end of 2008." The future of cars in America..... But not any time soon, as there is still too much money to be made off Americans and oil.
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#1. To: richard9151, Dakmar (#0)
Someone was telling me about a $12K car called the 2 by 4?
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