The Nano: Tata's Costly Promise

Rising expenses are squeezing the profitability of the Indian automaker's supercheap car, whose price was originally set at $2,500
Chairman of the Tata Group, Ratan Tata comes out of the 'Nano' car. MANAN VATSYAYANA/AFP/Getty Images

On a recent weekend in Delhi, Rajesh Malhotra was shopping in the city's crowded Bhogal market with his two children, ages 6 and 12, who were hanging on to his one-year-old, $1,400 motorcycle. Like many Indians, Malhotra, 42, can't afford the $4,300 price tag of the Maruti Suzuki 800, the least expensive car in the country. That's why he had been hoping to buy a new Nano, the revolutionary $2,500 car that India's Tata Motors (TTM) plans to launch this fall.

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