The Tata Nano - Now on sale in India

The world’s cheapest car finally has an on-sale date.

When it appeared January 10 at the New Delhi Auto Expo, the Tata Nano amazed everyone with its rock-bottom starting price of $2,500 ( tax and transport fees). Tata Motors executives explained how and why the company chose to build such a low-cost car, but no one would go on the record to say when the Nano would go into commercial production.

Dozens gathered Thursday to gawk at the silver Nano sitting on a red platform with pink satin skirting at the Tata dealership in Coimbatore, a mid-sized manufacturing hub in southern India. Two DJ's blasted Backstreet Boys, Ricky Martin and Madonna songs, while college kids snapped photos of the snub-nosed car on their cell phones.

Despite the festivities, analysts say Nano sales won't do much in the short term to help debt-strapped Tata Motors, which is facing falling sales and is in talks with banks to refinance a $2 billion loan it took out to buy Land Rover and Jaguar from Ford last year

The car is currently being manufactured in limited numbers at the company's Pantnagar plant in Uttarakhand while a new dedicated plant in Gujarat with an annualized capacity of 350,000 cars will not come online until 2010. In the meantime, the first 100,000 cars will be allocated at random to those who've put down a deposit.

Nano, which it has pitched as the "people's car"--a first automobile for families that, until now, have had to crowd onto a scooter. There are only approximately nine vehicles per 1,000 people in India, according to the Reuters news agency.

The deluxe version of the Tata Nano (photo from January 2008).
(Credit: Tata Motors). Bookings will close in just more than two weeks, on April 25. The company had made application forms for bookings available at the beginning of the month and said the response has been "very encouraging."

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Tata will accept orders until April 25 and then randomly select 100,000 people who will get the first shipment of vehicles. Everyone else will have to wait. Tata will pay interest on booking deposits: 8.5 percent for people who have to wait one to two years to get their Nano, and 8.75 percent for those who hold out longer.

Tata will accept orders until April 25 and then randomly select 100,000 people who will get the first shipment of vehicles. Everyone else will have to wait. Tata will pay interest on booking deposits: 8.5 percent for people who have to wait one to two years to get their Nano, and 8.75 percent for those who hold out longer.

But even then, there could be a long wait for those who've booked a Nano order. At the end of June, Tata plans to announce the allotment of the first 100,000 cars, as determined by a computerized random selection. News agencies reported that it will likely take Tata more than a year to fill the 100,000 orders.