So you think your X has problems...

[Fraser]

On the news this morning... (and this is the company that now owns Jaguar and Land Rover)


Satish Sawant was proudly driving his first car home from the showroom: a brand-new silver Tata Nano, draped with a celebratory garland of marigolds.

Then there was smoke. And then there was fire.

Minutes after the software engineer's wife and five-year-old son clambered out of the back seat, smoke from the engine, located in the Nano's rear, erupted into flames that engulfed the tiny car.

His ordeal showed the latest problem with the low-cost Nano - raising fresh questions about safety and quality as top Indian carmaker Tata Motors sets its sights on global expansion and aims to ramp up production of the Nano with a new factory next month.

"My wife now doesn't want to buy any car," Sawant said by phone from his home in Mumbai on Thursday. "She doesn't even want to go for a Mercedes."

Starting around $US2,500 ($2,760), the Nano has been heralded as the world's cheapest car, and was meant to usher in a safety revolution, which would get millions of families off dangerous motorbikes and into an affordable car.

Tata Motors, which also owns Jaguar and Land Rover, plans to start selling the Nano in Europe in 2011, then in America.

Tata Motors spokesman Debasis Ray said the company is investigating the incident but believes it isn't the result of faulty design or manufacture.

"We believe it was a one-off stray incident," he said. "It did catch fire. We're trying to figure out what may have caused it."

Tata has offered Sawant a replacement Nano or a refund.

This is not the first time there have been customer complaints about the Nano.

Last fall, three customers in India complained their Nanos started smoking.

Tata Motors attributed that to a faulty electrical switch and said it had changed suppliers and done tests to rule out a recall or redesign.

Ray said the incidents are not related.

But some say the problems are symptomatic of quality control issues at India's number three carmaker, which must be addressed before Tata can succeed globally - especially after Toyota's massive recalls, which have left car buyers jittery about safety standards.

"As of today, is Tata good enough to take on the world? I would say no," said Deepesh Rathore, an auto analyst at IHS Global Insight in New Delhi. "On quality standards, Tata barely makes the cut."

Meanwhile, Uruvashi Shah, manager of Ashapura Travel World, which runs a high-end taxi service, said she has gotten rid of the Tata models in her fleet because they needed too much repair work.