Tata aids air car launch

Plans by Indian car giant Tata Motors to produce a car this year powered only by compressed air have been delayed until further notice, but unofficial sources say Tata may have come to the rescue of the air car's french inventor MDI by investing $30 million in the project.

Tata originally signed the deal to use technology developed by French inventor Moteur Development International (MDI), in February 2007, with the hope of launching the new ‘air-car’ in India in 2008.

However, according to MDI, the car will be first launched in France by the end of 2008 or early 2009, produced by the company’s factory in Nice.

Although Tata and MDI decline to reveal details, unofficial sources say Tata may have come to MDI’s rescue by investing $30 million in MDI's project.

The air car, made from carbon fibre and aluminium, will use compressed air to push the engine’s pistons, propelling the vehicle. According to MDI, the car achieves a top speed of 68mph with a driving range of 125 miles.

Owners will have the option of filling the tank at a designated compressed air station in three minutes, with an estimated cost of about $2, or simply plug the car into an electrical grid for four hours to fill the tank using an onboard compressor.

MDI plans to manufacture two variants of the car, including a single-energy compressed air engine which uses only compressed air, and a dual-energy model which allows the owner to switch between compressed air and another fuel. The dual energy model is designed to run on petrol, liquefied petroleum gas, bio-diesel, or alcohol.

Landmark vehicle stuck on amber

MDI, based in Nice in the south of France and founded by a former Formula One engineer Guy Negre, has been developing the air car for 14 years. Despite proving the technology with prototypes, the car has missed several commercial launch dates.

There was renewed hope amongst green-car enthusiasts when Tata agreed to produce the air car, promising an initial production of 6,000 units in 2008. However, one year after signing the pact, both Tata Motors and MDI are tight-lipped about the future of the project in India.

Tata treated the pact-signing as a low key affair last year. In a rare comment in January on the project, Debasis Ray, Tata Motors’ head of corporate communications, was quoted in the media saying “the air car still requires at least two years to refine its technology”.

Nice prospect

MDI spokesperson Allan Zaire says the car has "no shortcoming in technology" and is confident that the car will meet the EU homologisation standards necessary to sell it in Europe. MDI will not miss the latest 2008/2009 projected launch date, he says, as the company has “resolved [it's] financial problems”, increasing rumours that Tata may have come to MDI’s rescue by investing $30 million in the project.

MDI’s other licensees are required to set up a standardised manufacturing plant which employs only 65 people who build one car every 30 minutes. Zaire says the company has appointed 21 such licensees in France, who in turn will be shareholders in MDI, a non-profit entity. After their initial investment in the plant, they will contribute one percent of the car sale to MDI.

However, Zaire reveals that the agreement with Tata is a “one-off deal on very special terms which is not going to be repeated with anyone else”.

“Tata has an exclusive licence for India. They are free to use the technology as they wish. They have the liberty to use their own plants to manufacture the car or use the technology for any other application as they deem fit.”

When or whether Tata will launch an air car in India remains open to speculation. After 31 months of negotiation, Tata timed the MDI deal when it was under attack by environmentalists over the launch of its ‘$2,500 People’s Car’, the Tata Nano, leading some observers to view the MDI deal as an image-saving PR stunt.

Insiders say the chairman of the Tata Group, Ratan Tata, who has an ambition to make Tata Motors a global leader in auto technology, was fascinated by the air-car idea, prompting him to explore the technology with his own R&D engineers.

Technological snags

Murad Ali Baig, a prominent Indian car analyst, says: “There is a degree of scepticism about the air car.”

Apart from fine-tuning the technology, there will be other challenges for Tata to contend with. Baig said: “Tata will have to create a whole new infrastructure of filling stations, town by town. Self-filling will not work. How will one plug the car from a 10th floor flat, for example?"

“Tax benefits will also be crucial. Electric cars did not do well in India partly because there is no tax advantage, leading to high pricing.”

According to Baig, the Tata Indica, a five-door compact hatchback priced at about $9,000, could be the best candidate for air car technology. If Tata is able to offer a dual engine Indica that can switch between fuel and compressed air, it may be an attractive proposition to commuters, although with a heavy steel body, the Indica would not acheive the same speeds using compressed air as the original air car. A bi-fuel Nano, Tata’s small car, may be a better candidate from a weight perspective.

In the short term, Tata has turned its attention towards setting up new truck plant in Thailand, launching a new series of its SUV models Sumo and Safari, and a new range of trucks in India. Not to mention the recently launched budget small car Nano. The company also has aggressive export expansion plans and takeover bids for Jaguar and Rover in the works.

A dirty business

With the low hanging fruits of the traditional car manufacturing market in India still to be harvested, Tata is unlikely to see the economic case for the air car until clean air legislation gathers more pace in India. Current emission standards are already 10 years behind European standards and do not include greenhouse gas emissions. The country is reportedly aiming to set fuel efficiency standards for all vehicles by 2010.

Baig points out that the air car is not totally pollution free as electricity is required to refill it, which will create pollution elsewhere as long as India continues to use fossil fuel to increase its power generation capacity.

Air compression also has a clean air rival in India - compressed natural gas (cng). The New Delhi administration has recently talked about banning diesel cars in the capital to reduce pollution, which might encourage owners to switch to cng, an option already available with most car models.