World's Cheapest Car Introduced

Ronald Bailey | January 10, 2008

India's Tata Motors unveiled the Nano--the world's cheapest car yesterday. The Nano is about 10 feet long, 5 feet wide. The 2-cylinder petrol engine delivers 33 horsepower and a top speed of just over 60 mph. The $2500 basic model has no radio, air-conditioning or air bags, but it does have seat belts, a catalytic converter to reduce air pollution and gets 50 miles to the gallon.

Compare the Tata Nano with the Ford Model T which was introduced in 1909. According to the Kansas City Star, it cost $825, had a 4-cylinder, 20 horsepower engine with a top speed of 45 mph. The Model T had fuel economy between 13 to 21 miles per gallon. It had no seatbelts, air-conditioning was provided by lowering the top, but it did feature acetylene headlamps.

Nearly a century of technological progress makes things a lot cheaper and vastly more functional. In inflation-adjusted terms, a Model T would cost about $18,000 today. Conversely, a Tata Nano would cost only $115 in 1909 dollars.

Now that's progress!

Update: I can't resist comparing the Tata Nano to the 1960 VW Beetle.

The 1960 Beetle had a 34 horsepower engine and got 30 miles per gallon. It had no pollution controls or seat belts. The big news is that the Beetle got an actual gas gauge in 1961. It cost $1,565.

So today, a 1960 VW Beetle would cost about $10,500 in inflation-adjusted dollars. A Tata Nano would cost only $375 in 1960 dollars.

And what about the 1985 Yugo?

In 1985, it cost $3,990. Today, that would be about $7,500. And a Nano would cost around $4,700 $1,350 n 1985 dollars.