Tata initially targeted the vehicle as "the least expensive production car in the world" — aiming for a starting price of 100,000 rupees or approximately US$2000 (using exchange rate as of 22 March 2009) 6 years ago, despite rapidly rising material prices at the time.
As of August 2008, material costs had risen from 13% to 23% over the car’s development, and Tata faced the choice of:
- introducing the car with an artificially low price through government subsidies and tax-breaks
- forgoing profit on the car
- using vertical-integration to artificially boost profits on cars at the expense of their materials industries
- partially using inexpensive polymers or biodegradable plastics instead of a full metal-body
- raising the price of the car
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