Tata Motors' Nano isn't Very Safe

The car industry is one of the more globalized industries. GM and Toyota, among others, build cars on every continent (minus Antarctica, obviously). Automakers are always trying to gain the upper hand in the Chinese market, which is basically the biggest market for car sales since the U.S. has slowed its appetite for autos because of the recession.

India, you would think, might be pretty big too, since it is the second most populous nation on earth. However, you would be wrong. Unlike China, there aren't a whole lot of middle-class or upper-class citizens and poverty is widespread. So while a Buick might sell well in Beijing, this is not the case in India.

India's own Tata Motors began selling the Nano throughout its domestic market in March of 2009. Now, they are having safety issues:

Tata Motors Ltd. (TTM), maker of the Nano, said Wednesday it will offer buyers of the world's cheapest car additional safety equipment free of cost and clarified it won't recall any of the units.

The Press Trust of India earlier in the day reported that the company, India's largest auto maker by sales, will recall some units of the minicar to add safety features, citing Tata Motors' managing director for India operations, P. M. Telang.

"We have decided to make the car even more robust. We will do this by providing additional protection in the exhaust system and the electrical system," the auto maker said.

"These actions don't constitute a recall."

Some customers in India have reported incidences of the minicar catching fire. But after investigating in May, Tata Motors said that there aren't any manufacturing defects and that such episodes have been because of the installation of additional electrical equipment or due to some material on the exhaust system.

Why does this matter?

This incident illustrates are very important fact about the world auto industry. Standard in Western Europe, North American, and Australia are much more strict than those in China, India, Russia, and Africa. This poses a very serious challenge for auto makers as they attempt to expand their global reach. For companies used to strict safety standards, they must adapt their vehicles to sell in poorer markets. Safety features are expensive, so U.S. and European automakers must adapt to compete in poorer parts of the world were safety isn't a big concern.

Automakers in less-developed countries must spend a lot of money on safety feature research to compete in areas with stricter controls.

Other than the quote from the article, this has been my opinion based on what I have read and learned about the auto industry throughout the world.