India's Tata Group unveiled on Jan. 10 the world's cheapest car costing $2,500 amid predictions the no-frills vehicle could revolutionise how millions in India and elsewhere travel. The launch of the Tata Nano was a landmark in the history of transportation, claimed 70-year-old tycoon Ratan Tata, the head of the giant conglomerate, while rejecting fears the spartan car would add to congestion and pollution. The four-door, five-seater vehicle is due to hit the roads later this year at just 100,000 rupees excluding tax, after Tata Group cut costs back to the bone.

The theme from Stanley Kubrick's film, "2001: A Space Odyssey," played as Tata unveiled the snub-nosed Nano -- so-called to appear both high-tech and small -- to cheers and applause at the annual Delhi car show. Ratan Tata, who drove a Nano into the unveiling, said he had wanted to make "a safe, affordable and all-weather transport -- a people's car, designed to meet all safety standards and emissions laws and accessible to all."

The Nano has a small, rear-mounted engine with a top speed of 105 kilometers (65 miles) per hour. But the basic model has no air conditioning, electric windows or power steering, although two deluxe versions will be available.

The Nano initially targets increasingly affluent Indians trading up from a motorcycle to a car amid an economic boom, but there are plans to enter other emerging markets such as Latin America. Soaring commodity prices had pushed up costs during the car's four-year development, but Tata said he had wanted to keep his pledge of a 100,000-rupee price tag, although tax will make the onroad price at least 120,000 rupees. He argued the new car would be better and safer than most motorcycles on India's roads. "The car we have designed will meet all the current safety requirements ... and will have a lower pollution level than even a two-wheeler being manufactured in India today," he said.

Environmentalists fear the Nano will jam up India's already clogged roads even more and add to choking pollution if it proves a winner. "With more cars you have more emissions and that adds to global warming -- what we need is public transport," said Souparno Banerjee, an official of Delhi's Centre for Science and Environment.

The Nano has sparked a race among global automakers to come up with vehicles at rock-bottom prices to appeal to the new lucrative segment of consumers in India and other emerging markets. Small cars comprise two-thirds of annual passenger vehicle sales in India. The budget car's nearest rival, the Maruti 800 from Japanese-owned Maruti Suzuki, sells for $4,800.

Copyright Agence France-Presse, 2008