The cheapest car in the world, Nano, unveiled by the Tatas, could translate into a 65 per cent increase in the number of families that can afford a car, as per the estimates by Crisil Research.
The agency, in an analysis said the expected consumer price of the car would be around Rs 1.3 lakh.
"This brings down the cost of ownership of an entry level car in India by 30 per cent, making a new car affordable to families with income level of Rs 2 lakh", the agency said.
CRISIL Research said this launch will prompt product developments in the mini car category by other players in the passenger vehicle segment over the next few years. These launches will attract a section of existing two-wheeler owners, currently estimated at about 50 million, to upgrade to a car.
"Given the shape of the income distribution in India, the new price point translates into a 65 per cent increase in the number of families that can afford a car", it said. While annual car sales in India have the potential to increase by 20 per cent, over the annual sales expected in 2007-08, it added.
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