The debut of the world's least expensive car comes at a time when the entire auto industry is in crisis. Demand for vehicles has plunged with the global recession, hobbling two of Detroit's giants, GM and Chrysler. Even Toyota, the model of a modern car company, is facing its first operating loss in decades. Tata Motors, India's largest automaker, is not immune. Sales of its commercial vehicles and cars have slumped, and debt from the company's purchase last year of luxury brands Jaguar and Land Rover is weighing on Tata Motors' balance sheet. Tata argues that the Nano is exactly the right car for these difficult times. "If I had conceived a million-dollar supercar today, I think you'd have every reason to question whether that's the right product at the right time in the planet that we are living in," Tata told TIME during a March 5 interview. "What has happened in the changing global economic situation reinforces, if nothing else, the fact that a low-cost car has a place.
Yet the path that Tata Motors has followed to bring the Nano from sketchpad to showroom may prove to be much more important than its price tag. The company's engineers and parts suppliers started from scratch, rethinking every component to minimize cost and weight without sacrificing basic performance, comfort and style. As battered carmakers search for new business models to adapt to shifting, shrinking consumer demand, the Nano may point the way to the future — one that will likely revolve around smaller, more fuel-efficient and more cheaply produced vehicles.