St. Cloud State economics professor King Banaian wrote a perfectly good blog post the other day about how scholars use data and studies (in this case about global warming) to test their beliefs about the world.
"And what you think is true evolves, with questioning and skepticism all along the way," the professor concludes.
Apparently such thinking is not required when professors tweet — or respond to tweets — but let's assume 140 characters is just a limitation on discussion, not skeptical thinking.
My own skepticism was triggered by King's claim:
$2500 Tata Nano will cost $8000 after the EU and US regulators get done with it. The UAW says THANKS! http://is.gd/6meIu
The source for this insight, or at least his link, is this one paragraph:
DETROIT (AP) -- The world's cheapest car ($2,500) is being readied for sale in the U.S., but by the time India's Tata Nano is retrofitted to meet emissions and safety standards, it won't be that cheap. Tata Motors already has made a European version of the four-seat car that will cost about $8,000 when it debuts in 2011, and a Tata Technologies official said privately that the U.S. version is expected to have a comparable price.
Cute on the outside, Tata Nano base model is a bit... basic.
Now maybe the professor intended it as a one-liner, but my hobby is digging into one-liners attempting to become political memes — in this case, that government regulation is denying American consumers a great, inexpensive mode of transportation.
You know, like it denies toddlers baby charms made with lead, forcing their moms to buy cadmium instead. I mean, how many kids actually gnaw on their bracelets?
King says:
But the young fella with only $3000 to spend on a car can buy it in India but not in the US due to regulators. Is that right?
No, it's not.
Here's a bit more about the Tata Nano, from Car and Driver.
We must not forget that the Nano is first and foremost a car for India, a country of about one billion people where fewer than two percent own a car. It was instigated by Ratan Tata, the chairman of the Tata conglomerate, India’s biggest corporation, in a gesture that looks as much philanthropic as business savvy. Watching the way whole families travel on motorcycles—rider, pillion passenger, and two children hanging on—and noting the terrible toll in road deaths involving two-wheelers, Tata called for a safer four-wheeled vehicle that bike riders could afford.
To be able to make a car so cheaply, the designers threw out safety features like airbags and stability control. Ever driven a golf cart at full throttle? Well, the Nano's flat-land top speed is allegedly 65 mph on 12-inch wheels. They also put no emission controls on what's essentially a pepped-up, 35 hp lawnmower motor.
Oh, yes, and how many US drivers with $3,000 to spend will like to drive a manual transmission that takes them from 0 to 37 mph in 8 seconds?
Tata cut other corners as well.
That $8,000 price tag for the Euro version includes an engine nearly twice the size of the $2,500 Indian model, a five-speed transmission, and accessories US drivers (not regulators) might require, such as heat, cooling, audio and decent seats.
In other words, Tata is not just responding to regulators as it gets ready to bring the Nano to other countries. It's responding to their markets. Failure to do that would kill the Nano dead in its tiny American tracks.
As an economist, maybe King understands the difference between selling a product in an actual market and to selling it to make an ideological statement. Maybe he also knows that concept cars and manufacturer hype often don't live up to expectations — or live at all.
Still, he insists that a US business should be able to sell this product without interference if someone wants it.
Never mind that America is already loaded with $2,500 cars equipped for these roads and traffic conditions, as well as companies catering to the limited street-legal golf cart market. Never mind that for India's hundreds of millions of potential drivers, the base Nano is a step up, while for even Yugo owners, it would be a step down.
It's the principle!
Somehow, King would magically import these $2,500 beauties made by cheap foreign labor, develop distributorships and change consumer perceptions about tiny, unsafe and polluting autos with little comfort and no accessories, while keeping that dazzling price point — and finding enough buyers to keep from losing his professor's salary many times over.
I suggest testing the market first with the young fellas in LA, El Paso, or say, Green Valley, Arizona. The Michigan dealer franchise can wait.
