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India's Tata Motors set to introduce ultra cheap car next year

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NEW DELHI (AP) _ Indian automaker Tata Motors is on track to begin selling an ultra-cheap small car next year, a top executive said Wednesday.

Managing director Ravi Kant, however, acknowledged that higher costs may make it difficult to stick to the targeted price of US$2,400, or 100,000 rupees.

Steel and rubber prices have risen sharply in the past three years since company chairman Ratan Tata first announced a 100,000-rupee car.

Kant did not say whether the company would revise the price. ``Wait for the launch,'' he told reporters.

``We will launch the car sometime next year,'' Kant said, addressing speculation that the project could be delayed by new costs and political unrest last year at its new plant in eastern India.

Auto makers from around the world are keenly watching progress in the Tata project, which analysts say could set new price benchmarks and force other manufacturers to follow suit.

Already, French auto maker Renault SA and its Japanese partner, Nissan Motor Co., are trying to determine if they can sell a compact car for less than $3,000.

Renault has said it is talking to some Indian manufacturers, including auto rickshaw manufacturer Bajaj Auto, about a possible partnership.

Japan's Toyota Motor Corp., South Korea's Hyundai Motor Co. and Chinese auto maker Chery could also be looking to make ultra-cheap cars in India, according to Craig Cather, chief executive of German auto consulting firm CSM Worldwide.

``A lot of companies are buying into this segment,'' Cather said.

India is among the world's fastest-growing automobile markets, thanks to a booming economy that has boosted middle class incomes and spurred demand for cars. India also is emerging as an export hub for small cars.

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India's Tata Motors set to introduce ultra cheap car next year
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