Mike Rutherford's Column

	It’s not the Nano which will revolutionise the new car industry in the UK. It will be rival firms brave enough to follow Tata's fine example.

January 10, 2008 must go down as one of the most glorious, significant and genuinely important days in the history of the global motor industry. It was also a good day for common sense and consumer power. The 10th was when the Indians finally arrived on the world automotive stage. They tore up the motor manufacturing rule book, and revolutionised showroom pricing policy around the world… and sent shivers down the corporate spines of American, European, Japanese, South Korean and Chinese firms, which must now respond.

Tata and its £1,300 Nano can be thanked for all the above. Until now, this has been a fourth-division manufacturer of vehicles of indifferent quality. The Tata Safari 4x4 is a shed on wheels. And the CityRover that Tata built until recently on behalf of MG Rover was a dog. For all I know, the Nano will be as rough around the edges as its predecessors. But who cares? What do you expect for £1,300?

This is the sort of cash that can easily be spent on a plastic motorcycle which goes and sounds like a hairdryer. Alternatively, £1,300 buys a non-motorised two-wheeler, albeit a good-quality one. Or you could spend this money buying half-a-dozen return rail tickets from southern to northern Britain, or vice versa.

So, the price of hiring a second-hand seat, on a second-hand train carriage for a matter of hours is now about the same as the outright purchase of four brand new seats housed within a brand new motor car that will last for years. Again, to put the magic £1,300 in context, the Chancellor, Alistair Darling, makes more than that in VAT alone on most of the cars sold in Britain.

I know, I know – even if you wanted one, you can’t buy a Tata Nano in the UK, and even if a few did start trickling in officially or on the grey market, they would not retail at anything like £1,300 by the time importers, Government ministers and other entrepreneurs took their slice of the cake.

Truth is, your chances of getting a Nano for £1,300 in Britain are nil. But even at twice the official price, I’d be tempted. Wouldn’t you? A UK value of £2,600 would still make the Tata twice as affordable as the Perodua Kelisa – currently the cheapest model here at £4,792. But my prediction is that it’s not Tata and the Nano which will revolutionise the new car industry in the UK. It will be rival companies brave enough to follow the Indian firm’s fine example.

The Chinese are the best placed to emulate Tata for a variety of reasons: they too have a low cost base, plus an enormous and dirt cheap (only 30p an hour) pool of car factory workers. Chinese makers also need gimmicky, cheap-as-chips vehicles that will enable them to find buyers and create goodwill among the consumers they seek in the west.

Without being too unkind, no consumer in his right mind would buy an untried, untested Chinese-branded car over a European, American, Japanese or South Korean model unless it is massively – and I’m talking at least 50 percent – cheaper. Japanese and South Korean makers could also produce bargain-basement motors based on previous-generation models.

And since these two wealthy, north-east Asian countries have their own plants in low-wage regions such as Eastern Europe and southern Asia, they too could build £1,300 cars. And let’s not forget Europe and Longbridge in all this – a crude, stripped-out, new-generation Metro for under £2,000, anyone? You’ll find me at the head of the queue.