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Jeremy and Michael: I've read that the super-cheap Tata Nano is not selling well in India and I cannot understand why. I'd buy a $2,500 car if it went on sale in Canada. I'd do so in a nanosecond. I don't get why we can't have cheap new cars here.

You guys are always carrying on about Porsches and BMWs and all that. I don't care to spend $100,000 on a car. Makes no sense to me. I don't need to drive an ego trip. I want a Nano; $2,500 is plenty for a new car, at least in my neighbourhood. - Don in Guelph

Cato: Tata's Nano, the lowest-priced car in the world, was a shocker when it arrived and has been a dud since. Vaughan, it seems you and Don are among the very few who see something in the Nano.

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Vaughan: Cato, you know very well that the Nano was never intended for Westerners. It was designed and priced to compete with motorized rickshaws in Asia - India in particular.

I am, however, convinced that car companies in the West could learn a thing or two from Tata's design and manufacturing tricks with the Nano. We know that Tata is serious about exporting its Nano to Europe and North America - but a very different version, a stronger one, not the flimsy $2,500 model.

Cato: Get serious. You and Don may dream of a car with no side mirrors and one windshield wiper, but you're in a tiny club. I don't believe we'll ever see a Nano derivative in Canada or the U.S. - not when the average transaction price of a new car here and down south is more than $30,000.

And certainly not when analysts are predicting sticker prices will climb towards $40,000, on average, with the arrival of big-time corporate fuel economy rules in 2016.

Look, the average Ford Fiesta is going out the door right now at almost $20,000. We're talking about the smallest car made in North America - a B-size - and the most fuel-efficient in its segment. Cars are getting more complicated because of fuel efficiency, emissions and safety regulations. More complicated means expensive, not cheaper.

Vaughan: I'm afraid you're right, Cato. Don and I would love to be able to buy a $2,500 Nano, but it's not going to happen.

Cato: Of course not. Safety systems and robust designs cost money. They work, but they add cost. Look, more than 100,000 people a year are killed in car accidents in China, where regulations are far more lax than in the United States and Canada. Now consider the U.S.: with millions more vehicles on the road driving much farther distances, the number killed on the road is a third of that - 35,000 or so. Safer cars are pricier cars.

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Vaughan: Always with the numbers, Cato. But yes, the major car companies in Germany, North America, Japan, South Korea are all working on advanced safety systems. We've tested cars with radar that tells the driver what's in front and alongside and then takes control if the driver doesn't react to a potential crash.

Cato: More safety systems are coming and they won't be cheap. Every year, governments tighten the screws on safety regulations a little more, adding more cost to new cars.

Vaughan: Don, Cato will also lecture you about similarly costly changes happening to improve fuel economy and the reduce emissions.

Cato: It's not a lecture; I'm only laying out the facts. All these auto makers are carrying on about electric cars and the developments are exciting. But Volkswagen says a kilowatt of energy now costs $500 to $1,000 in batteries.

Okay, a small VW electric car is planned for 26 kilowatts. So $13,000 to $26,000 in batteries for a small city runabout the size of a Nano. And we haven't even talked about lightweight materials, carbon fibre, advanced plastics - making cars lighter without compromising safety will make cars more expensive.

Vaughan: Okay, Cato, lecture over. The Fiesta sedan at $12,999 is fuel efficient, but what else? If Don can't have a Nano, what else?

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Cato: The Nissan Versa. Small, hugely fuel-efficient and very basic versions sell for $12,698, less than the starter Fiesta. The Versa is pretty bare bones, which should appeal to you and Don.

Kia is getting ready to replace the Rio with a new version. You and Don, I am sure, will like the deals on a Rio, even though the cheapest sedan version lists for $13,695. Look for at least a couple of thousand dollars in factory discounts.

Vaughan: Not a Nano among them and every car on this list is five times as expensive. That's the price of government.

Jeremy Cato and Michael Vaughan are co-hosts of Car/Business, which appears Fridays at 8 p.m. on Business News Network and Saturdays at 11:30 a.m. on CTV.


2011 Kia Rio EX sedan

2011 Nissan Versa 1.5S sedan

2011 Ford Fiesta S sedan

Wheelbase (mm)




Length (mm)




Width (mm)




Height (mm)





1.6-litre four-cylinder

1.6-litre four-cylinder

1.5-litre four-cylinder

Output (horsepower/torque)

110/107 lb-ft

107/111 lb-ft

120/112 lb-ft

Drive system

front-wheel drive

front-wheel drive

front-wheel drive


five-speed manual

five-speed manual

five-speed manual

Curb weight (kg)




Fuel economy (litres/100 km)

7.1 city/5.8 highway

7.7 city/5.8 highway

7.1 city/5.3 highway

Base price (MSRP)




Source: car manufacturers

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About the Author
Senior writer, Globe Drive

In 25 years of covering the auto industry, Jeremy Cato has won more than two-dozen awards, including three times being named automotive journalist of the year. Jeremy was born in Montreal and grew up in the San Francisco Bay Area. More

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