Cheap Indian cars coming, warns Canadian minister

TORONTO: Nano, Tatas' small car with a price tag of just $2,500, is already being viewed as a threat to the North America auto market even before its launch in India.

With BRIC (Brazil, Russia, India and China) nations set to overtake them in production this year, North American auto giants may soon face challenge from cheap cars from India and China.

Canadian Industry Minister Jim Prestice gave this warning Wednesday when he said that unless steps were taken to cuts costs and delays in cross-border movement of auto parts, North American-produced vehicles will be outpriced by Indian and Chinese vehicles in their own market very soon.

``Not long from now, we will see the first Chinese - or Indian - manufactured vehicles arrive on North American shores, ready to be sold to eager consumers. These vehicles will have encountered a border delay only once,'' Prentice told the Council of the Americas in Washington.

In the post 9/11 world, he said, despite the North American Free Trade Agreement (NAFTA) businesses in Canada, Mexico and the US were suffering because of ``the burden of new measures to enhance security, as well as more rigorous enforcement of existing rules.

``This means that businesses in all three countries are facing longer delays, higher inspection rates, additional fees, and more layers of security when they can afford it least.''

He said the costs and delays of an automobile part as it travels across national borders on its way to final assembly added several hundred dollars to the price of a North American-built vehicle.

Describing these problems as a `two-headed monster', the minister said, ``We want security and prosperity. Instead, we make it more difficult to have either. Not only do we hamper the legitimate trade and travel that provide the foundation for North America's prosperity, but we are also clearly misallocating resources.

``The dollars, hours and resources spent investigating legitimate travel and trade are dollars, hours and resources that would be better spent targeting the areas of highest risk.''

The unveiling of Nano a few months ago made headlines in Canada, with dealers and buyers expressing interest in the world's cheapest car.