History

The project to create a 1 lakh rupee car began in 2003, under the Chairman of Tata Motors, Ratan Tata. The strategy behind the project was the awareness of the number of Indian families who had two wheeled transport, but couldn't afford a four wheel car, and was based on the company's success in producing the low cost 4 wheeled Ace truck in May 2005.

Industry convention was that a reliable car couldn't be made at such a low price, so initial media speculation was that the car would be a simple four-wheeled auto rickshaw. However, The Times of India reports that the vehicle is "a properly designed and built car". The Chairman is reported to have said, "It is not a car with plastic curtains or no roof -- it's a real car."

During development the company reinvented and minimized the manufacturing process, brought in innovative product design, and asked component manufacturers to look at current work and design approaches in a different perspective to produce logical and simple solutions.

The car was designed at Italy's Institute of Development in Automotive Engineering, with Ratan Tata ordering certain changes during the process, such as reducing the number of windscreen wipers from two to one.