Tata’s New Sedan Aims at India’s Upper-Middle Class

Tata Motors Ltd. hopes its first new car model in four years, the compact Zest sedan, will prove more successful than the company's ultra-low-price Nano.

The Nikkei points out that Tata's share of India's car market has plunged from a second-place 17% in fiscal 2005 to a sixth-place 6% this year.

Tata is targeting India's upper middle class with the 464,000-rupee ($7,600) Zest. The company touts the car as having world-class exterior design and an interior with luxury touches. The car is offered with the choice of a 1.2-liter gasoline engine or 1.3-liter diesel.

The Zest will compete primarily on price with similarly appointed Honda Amaze and Maruti Suzuki Dzire small sedans that retail for about 500,000 rupees ($8,200).

The Zest will be joined by the all-new hatchback Bolt later this year.

Tata's five-year-old Nano starts at about 100,000 rupees ($1,600). The car drew global attention when it debuted in 2009. But production delays, reports of fires and India's slumping economy hurt sales.

The Nikkei says demand for the Nano has plunged to about 1,000 per month, or one-tenth the volume Tata once expected.