Tata Motors makes Mercedes for the poor

India's Tata Motors on Thursday unveiled its much anticipated $2,500 car, an ultra-cheap price tag that brings car ownership into the reach of tens of millions of people. But critics worry the car could overwhelm the country's roads and create an environmental nightmare.

Photo: Tata Motors makes Mercedes for the poor

Tata Motors makes Mercedes for the poor

Click here to see photos of the cheapest car in the world

Company Chairman Ratan Tata, introducing the Nano during India's main auto show, drove onto a stage in a white version of the tiny four-door subcompact, his head nearly touching the roof, the AP reports.

Tata Motors Limited, formerly known as TELCO India's largest passenger automobile and commercial vehicle manufacturing company. It is a part of the Tata Group, and has its headquarters in Mumbai, Maharashtra. One of the world's largest manufacturers of commercial vehicles and known for its hatchback passenger vehicle Tata Indica, Tata Motors has its manufacturing base in Jamshedpur, Lucknow, Pune and Singur.

Tata Motors was established in 1945, when the company began making trains. Tata Motors was first listed on the NYSE in 2004. Tata Motors had created the wealth Rs. 320 billion during 2001-2006 and stood among top 10 wealth creators in India. In 2004 it also bought Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea.

Tata Nano is a supermini car launched by India's Tata Motors. The initial production target set by Tata Motors is 250,000 units per year.

According to Tata Group's Chairman Ratan Tata, the Nano is a 33 PS (33 hp/24 kW) car with a 624 cc rear engine, making it the first time a 2-cylinder gasoline engine will be used in a car with a single balancer shaft, and has a mileage of 22 kmpl under city road conditions, and 26 kmpl on highways - equal to 54 mpg–U.S. (4.36 L/100 km / 64.9 mpg–imp).

The Nano is 21% more spacious from the interior and 8% smaller from the exterior as compared to it's closest rival, the Maruti 800. The standard version of the car will cost Rs 100,000 (not including levies such as VAT/LT and transport charges) (USD 2500), making it the cheapest production car in the world. The car will come in different variants, including one standard and two deluxe variants. The Deluxe variant will have air conditioning, but no power steering.