Tata, Renault small cars may not be cheap:SugarwareZ-191:
Low-cost cars - be it Tata Motors' Rs 1 lakh project or Renault's $3,000 venture - may have caught the imagination of many, but customers may end up paying much more than they think they would.
While ever-increasing input costs are putting tremendous pressure on Tata Motors to keep its word on pricing, French carmaker Renault's ability to maintain the price at its stated range would largely depend on which Indian partner it chooses.
Vendors for the Tata Motors venture said on condition of anonymity that their agreement for the Rs 1 lakh car has a lot at stake unless committed volumes fructify. This is because the margins for supplying components for the small car were far too low compared to industry standards. "With the ever-rising input costs, keeping prices low is becoming a huge challenge," they said.
Tata Motors, however, is putting up a brave front with a company spokesperson saying: "The company is working toward meeting the target of Rs 1 lakh."
Earlier this year at the Geneva Motor Show, Tata Group Chairman Ratan Tata had said the ex-factory price of the car could be Rs 1 lakh considering the rising input costs. This means that when a customer finally buys the car, the on-road price could easily go up to Rs 1.25 lakh.
On the issue of vendors complaining about squeeze in margin and asking for secured volumes, the spokesperson declined to comment. "We cannot share details of our contracts because of competitive advantage."
Low-cost cars - be it Tata Motors' Rs 1 lakh project or Renault's $3,000 venture - may have caught the imagination of many, but customers may end up paying much more than they think they would.
While ever-increasing input costs are putting tremendous pressure on Tata Motors to keep its word on pricing, French carmaker Renault's ability to maintain the price at its stated range would largely depend on which Indian partner it chooses.
Vendors for the Tata Motors venture said on condition of anonymity that their agreement for the Rs 1 lakh car has a lot at stake unless committed volumes fructify. This is because the margins for supplying components for the small car were far too low compared to industry standards. "With the ever-rising input costs, keeping prices low is becoming a huge challenge," they said.
Tata Motors, however, is putting up a brave front with a company spokesperson saying: "The company is working toward meeting the target of Rs 1 lakh."
Earlier this year at the Geneva Motor Show, Tata Group Chairman Ratan Tata had said the ex-factory price of the car could be Rs 1 lakh considering the rising input costs. This means that when a customer finally buys the car, the on-road price could easily go up to Rs 1.25 lakh.
On the issue of vendors complaining about squeeze in margin and asking for secured volumes, the spokesperson declined to comment. "We cannot share details of our contracts because of competitive advantage."