PowerSource

While the US and possibly Europe face a recession, and most of the major auto makers reported losses this quarter (with GM sales off by 26% ), Tata Motors of India is doing quite well. In addition to currently enjoying a healthy economy, workers in India have government-subsidized gasoline, as do other Asian nations such as China. As Indian workers become more affluent, they are moving up from motor scooters to cars.

Tata recently announced it would be making the Nano, priced at $2500. These cars are far from reaching the minimum level of safety and pollution control required in the US and Europe. From GreenCarCongress:

“The Nano has a rear-wheel drive, all-aluminium, two-cylinder, 623cc, 24 kW (33 hp), multi-point fuel injection gasoline engine coupled with a CVT or 5-speed manual transmission. This is the first time that a two-cylinder gasoline engine is being used in a car with a single balancer shaft, according to Tata. The lean design strategy helped minimize weight. Fuel consumption is projected to be 5 L/100m (47 mpg US).” As you can see from the picture, it makes a Smart car look roomy.

It’s ironic to think of the head-scratching going on at Plug-In 2008 last month in San Jose, where you could hear about US engineers struggling to pack in all of the safety, space, and entertainment features into a car that can shift the US away from its current large carbon-footprint, while Tata announces a car with a potential market of millions that relies firmly on gasoline, and none-too-clean 2-cylinder engines at that.

However, Tata points out that the Nano pollutes less than the scooter it will probably replace. And Tata has already announced plans to bring out an all-electric and a diesel-electric-hybrid version of the Nano. Now, announcing is one thing and doing is another, but it appears that Tata is trying to feed a potentially huge Asian market for ultra-low-cost cars, while preparing for the Indian government to 1) pretty quickly stop subsidizing gasoline and 2) begin imposing tighter emission standards.

I don’t know who the dominant auto manufacturer will be in five or ten years, but I think there’s a good possibility that the real winners will be the semiconductor vendors that can supply the electronic control ICs to the increasingly power-miserly world transportation system. (Fancy way to say “little cars.”) I don’t think I saw a single electronics paper at Plug-in2008, but I’ll bet there will be an entire track there next year.