Tuesday, January 08, 2008

The People's Car and Automotive Globalization

How about a car expected to retail for only $2,500, or about the price of the optional DVD player on the Lexus LX 470 sport utility vehicle? India's Tata Motors (NYSE:TTM) will release the world's cheapest car on Thursday, read more here in the NY Times.

Tata Motors is also the likely candidate to acquire Jaguar and Land Rover from Ford for about $2 billion.

And at the same time, Ford plans to more than double its investment in India to produce a small car for the fast-growing local market and to build an engine manufacturing plant there. Ford will likely increase spending in India by $500 million, raising its total investment to $875 million, as it focuses on making the country a regional hub for small-car manufacturing.

Bottom Line: Think about it - Ford will get about $2 billion from an Indian company for its British vehicle division, and at the same time it will invest almost $1 billion back into India for its expansion of operations there. Tata Motors will introduce the world's cheapest car, and at the same time will probably be selling one of the world's most expensive cars - Jaguar. What a flat world.


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