NEW DELHI : The launch of the world's cheapest car in India is changing the face of the country's automobile industry.

Other carmakers are now gearing up to join the race to create a car for the masses.

The much-awaited 'People's Car' from Tata Motors was recently unveiled at the 9th Auto Expo in New Delhi.

A four-door car, the Tata Nano has a 624cc engine and a mileage of 23 km per litre.

Priced at Rs.100,000, or US$2,500, it is the cheapest car in the world.

It is also the realisation of a dream for Tata chairman, Ratan Tata, who has been instrumental in coming up with a car for the masses.

He says: "It's a car that is affordable, provides transport, meets all safety norms, emission norms - present and future, and will be a reliable form of transport, and will provide Indian families an "all-weather" means of safe transport. It is seen as a car that might change the manner in which one travels in semi-urban and rural areas which is presently not connected in any way."

And with its launch, the small car segment in India has definitely become hotter.

Existing cars in the category include the Maruti 800, Zen Estilo and Wagon R from Maruti Suzuki, Hyundai's Santro, Getz and the recently launched i-10, and the Chevrolet Spark.

Carmakers are targeting consumers who want to upgrade to a car at very affordable prices.

Even India's Bajaj Auto, which manufactures motorcycles and scooters, has come up with a concept for a car that they hope to realise very soon.

Rajiv Bajaj, Managing Director, Bajaj Auto, says: "As a two-wheeler maker, we are using two things. One - skills we have in making lightweight vehicles and two, the cost structure. We use these skills and cost structure and we make a car instead of a motorcycle. Really, the skills are the same and we hope that the cost structure will work to our advantage. We see it as a natural progression for us to go from two or three wheelers and go to something that's not so big. So it's a natural progression."

Consumers in the country are elated at the launch of the Nano.

Despite the fact that it is targeted at the rural populace, city residents are also looking forward to owning a car at almost one-third the regular cost.

Most say this will mean more cars on the roads than bikes and scooters.

Sarat Talwar, Visitor to the Auto Expo, says: "Most of the people who would normally be thinking of buying a bike would generally be upgrading. So generally, there is going to be a whole shift in the automobile market in India, probably in this segment. I mean, today a bike cost about 60,000 to 70,000 rupees so definitely, they would want to shift to a small car."

The people's car from Tata Motors is finally here.

It is looking at revolutionising the small car segment in India with promises of fuel efficiency and safety at an affordable cost.

But whether it will be able to meet the competition remains to be seen. - CNA/ch