• Home
• /
• Business

UAE Must Wait till 2011 for ‘People’s Car’

The ultra-cheap, $2,050 car must first be upgraded to meet the UAE’s vehicle safety requirements, which are more stringent than those in India, car dealers and automotive industry analysts said.

But the current version of the Nano lacks more than the air bags and anti-lock brakes that are mandatory here and in other Gulf countries. The 3.1 metre-long bug of a car comes only with manual transmission and a tiny, two-cylinder engine.

“Since only five per cent of the Gulf automobile market is manual, even an upgraded Nano has to be automatic before making a local market debut. So, there is little possibility for Nano entering the Gulf market in the foreseeable future,” said Samar Roy, Group Managing Director of Al Naboodah, distributors of Peugeot and Ashok Leyland vehicles.

Tata Motors Ltd. touts its long-awaited “People’s car” as a revolution in motoring by making it possible for the world’s poor to afford to drive. Skeptics argue that the Nano is underpowered. They say that buyers may pay for air-conditioning, a radio, or power steering but will probably find that the 623cc rear-engine car, with its single windshield wiper and diminutive trunk, won’t cope well with harsh Gulf weather conditions.

“Currently, the economy is bad, but not so bad that anyone would go for a $2,000 car. People come here with high hopes and dreams of good life, and they want to realise those dreams like me. If I can’t afford a good car here, I should go back to Egypt,” said Ashraf Kamel, Branch Manager of Al Habtoor Motors, dealers in Mitsubishi, Bentley, Aston Martin and Bugatti brands.

“Even the large expatriate community from India here would not go for such a cheap car. They also want to enjoy luxury cars.”

Four-wheel drive vehicles account for 40 per cent of cars sold in the UAE. Compacts such as Toyota’s Yaris and Corolla, Nissan’s Tiida and Chevrolet’s Optra – with engine capacities ranging from 1.3 to 1.6 litres — account for about 30 per cent of the market. However, several car dealers in Dubai expressed doubts about the sub-compact Nano’s prospects here.

“Traditionally, UAE market is for luxury, premium brands. Here people are attracted to big names, and go for high-end lifestyle products and cars. If an ultra-cheap car such as Nano is launched in UAE, it may get two to three per cent of the auto market share,” said Eli Boueri, Senior Marketing Manager of Liberty Automobiles, dealers in Chevrolet, Opel, Hammer, and Cadillac.

Mohammed Malik, Marketing Manager of a Suzuki dealership called Al Rostamani, said he would “never” recommend the Nano for this region. “It can be used for delivery purposes within a city. It can’t be recommended for emirate-to-emirate travel. Fuel consumption has not been a major deciding factor while people go for a car. Safety features are more important. Nano is not safe on high speed roads,” he said.

However, Tata Motors plans to make an upscale version of the car called Nano Europa that complies with European and Gulf nations’ — specifications and safety features. Tata unveiled the Nano Europa at the Geneva Motor Show in Switzerland on March 3 and plans to launch this upgraded model in 2011.

The Nano Europa may look similar to the regular Nano but will have a redesigned interior, a three-cylinder engine, a five-speed automatic transmission, electric power steering and a host of safety equipment.

Tata Motors, which acquired British luxury brands Jaguar and Land Rover in a $2.3 billion deal in 2008, will not be able to make more than about 50,000 Nanos in one year. That’s only a fraction of the 250,000 units the company had planned to roll out initially. Therefore, the car will be marketed only in India at the outset, analysts said.

Potential export markets for the Nano would be Cuba and other underdeveloped countries, they said.

Over the past decade, India has emerged as a small-car manufacturing hub for some of the world’s biggest automakers, including Toyota, Ford, Mercedes and General Motors. Annual exports of Indian-made passenger cars have jumped five-fold over the past five years.

Industry analysts predict India’s car exports over the next three years will surge nearly 300 per cent to more than half-a-million vehicles a year.