Deflation

When Tata made its vow to build a $2,500 car, many Western auto executives ridiculed the project, dubbing it a four-wheel bicycle.  They aren’t laughing anymore.  Tata’s model is a real car with four doors, a 33-horsepower engine, and a top speed of around 80 mph.  The automaker claims it will even pass a crash test.

That is from Business Week, p.45, 23 April 2007, here.  Here is another analysis, the car probably won’t be sold in America.  According to one estimate, meeting safety regulations would alone cost more than $4000.