NEWSMAKER-India's Tata revs up with world's cheapest car
MUMBAI, Jan 10 (Reuters) - Indian business baron Ratan Tata silenced critics 10 years ago when he unveiled Tata Motors' (TAMO.BO) (TTM.N) first car, the Indica hatchback.
His business acumen was again questioned as the truck and former locomotive maker hatched plans to build the world's cheapest car and buy Ford Motor Co's (F.N) premium Jaguar and Land Rover brands.
But Tata has remained steadfast and successful: the Indica has sold more than 1 million units and Tata Motors has emerged as the preferred bidder for the luxury Ford brands.
On Thursday, the 70-year-old chairman of the Tata Group unveils the "People's Car", a mini 4-seater expected to be priced, as promised five years ago, at 100,000 rupees ($2,500), less than half the price of the cheapest car on the market.
"I have confidence in what we can do, provided we are critical enough about what we can do and we have a desire to improve," Tata said in a rare television interview last month.
"You have to have a belief that you can do something. You have to carry that belief through till the end or decide not to do it. What we should not do is a half-hearted job," he said.
The automotive world has taken note. Volkswagen (VOWG.DE), Toyota (7203.T), Honda (7267.T) and Fiat (FIA.MI) have since said they are looking to build low-cost cars. On Tuesday, Ford said it would invest $500 million in India to make a small car.
And an alliance of Nissan (7201.T) and Renault (RENA.PA), which has made a big success of its no-frills Logan sedan, is developing a $3,000 car with Tata rival Bajaj Auto Ltd (BJAT.BO).
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Tata, recently ranked by Fortune magazine as one of the world's 25 most powerful businessmen, is credited with transforming the group from a sprawling, conservative conglomerate into a corporate powerhouse hungry for growth.
The Tata group, with interests spanning automotives, energy, hotels, retail, broadcast, software and telecoms, is India's second-most valuable by market capitalisation behind energy giant Reliance Industries Ltd (RELI.BO).
Last year, Ratan Tata landed India's biggest takeover, Tata Steel's (TISC.BO) $13 billion purchase of UK's Corus.
He also spearheaded Tata Motors' 2004 listing on the New York Stock Exchange, the only Indian auto maker on the Big Board.
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Tata Motors' initial roll-out of the Indica was far from successful, with Tata joking he was afraid to walk his dogs in the early days because angry customers would accost him to complain about parts that rattled and doors that did not shut.
The problems were quickly fixed, and the company, which was loss-making just a few years ago, controls about 60 percent India's bus and truck market and is the third-biggest car maker.
Even if he pulls off the Ford deal, Tata is unlikely to be seen scorching Mumbai's crowded streets in a Jaguar. He is known as much for his quiet style as for his aversion to the spotlight.
Belonging to the small but prosperous Parsi community known for its love of music and the arts, Tata upholds a family reputation for treating employees fairly and not paying bribes.
A conservative dresser, he avoids the party circuit and lives alone in an upmarket apartment, riding to work in a Mercedes or Tata Indigo, sitting beside his driver in a country where the class system is rife.
Tata, who studied architecture at Cornell University and management at Harvard, received one of India's highest civilian awards, the Padma Bhushan, in 2000 and is due to retire in 2012.
Asked in a recent newspaper interview if he had the fire in his belly for a further five years, he said: "Not really."
"In an ideal world, after the small car has been launched and is successful, that would be a nice time for me to exit." (Editing by Ranjit Gangadharan and John Mair)
