As promised, Indian car maker Tata Motors created history at the Auto Expo in New Delhi yesterday by unveiling the Tata Nano - the world's cheapest car, priced at $2,500! Sounds impossible, doesn't it ? Well, it is true, and contrary to what one might think, the Nano happens to be sleek and sexy too. The "People's car" is a compact, albeit spacious, 4-passenger, 630cc vehicle which boasts a mileage of 50 miles per gallon and complies with Euro IV emission norms.

The Nano, which has been in the making for 4 years, has endured much skepticism and controversy from rivals. Well, no surprise then that these rivals are now scuttling to keep up with the price competition, a benchmark that the Nano has now redefined. Speaking to a packed audience spilling out onto the roads (with several people even ready to place their orders), chairman Ratan Tata said "a promise is a promise," referring to the tough pricing goals that the car had to stick to in the face of the rising costs of raw materials such as steel and rubber. How did they do it? With ingenious technology (with 34 new patents) that, among other things, uses lighter steel and a smaller engine to keep the costs down.

The Nano basic will sell for $2,500 (before taxes), other models such as the air-conditioned deluxe model will vary in price up to $4,000. The cars are also expected to target the foreign markets in Africa, Latin America, and Asia soon. Check out the first glimpses in this video.