Tata LogoLATEST DELHI 2008 UPDATE: Tata has unveiled the Tata 1-Lakh Car and has named it the Tata Nano. Click here for the latest details on the new Tata Nano.

While countries around the world are competing to see who will play host to the tallest building in the world, something similiar is happening in the automotive industry: with every new small economical car announcement the target price level is being set lower and lower, with the latest being Tata Motors Ltd’s planned US$2,500 (RM8,600) car.

Tata’s head of sourcing for this project E. Balasubramoniam says the new project will redefine the concept of an entry-level car and targets a million of these US$2,500 cars sold annually. Tata is still working on the car and a target launch date is July net year. Bala says the final price must be kept at the US$2,500 level or the business case for the car will collapse.

Previously, sketches have been shown to the media that seemed to resemble a small egg-shaped car with a high roof. These ultra-entry level cars are intended for developing countries and might even find a place in countries like ours – where the cheapest brand new car currently still costs more than RM20,000.