Software engineer Satish Sawant, his wife and 5-year-old son escaped from the silver Tata Nano – which still bore a celebratory garland of marigolds on the front hood – before the tiny car was engulfed by fire.
A chauffeur initially was at the wheel, but Sawant said he had taken over driving before the fire broke out. Tata has offered Sawant a replacement Nano or a refund.
"My wife now doesn't want to buy any car," Sawant said by phone from his home in northern Mumbai on Thursday. "She doesn't even want to go for a Mercedes."
His ordeal showed just the latest problem with the low-cost Nano as Tata Motors sets its sights on global expansion and aims to ramp up production of the car with a new factory next month.
Tata Motors spokesman Debasis Ray said the company is investigating the cause of the fire. Although Ray said the automaker believed it was "a one-off, stray incident," he also said he did not know how the blaze began.
"It did catch fire. We're trying to figure out what may have caused it," Ray said.
Last fall, three customers in India complained that their Nanos started smoking, but Ray said Thursday the incidents are not related to this week's fire.
Tata Motors attributed those to a faulty electrical switch and said it had changed suppliers and done additional tests to rule out a recall or redesign.
The switch problem, he said, "has been comprehensively addressed."
"Safety has never been an issue with Tata cars," Ray added. "They are one of the safest cars on Indian roads."
The Nano has gotten rave reviews and awards, but some say the smoke and fire problems are symptomatic of pervasive quality control issues at India's No. 3 carmaker.
The Nano was meant to bring automobile ownership to the impoverished masses – first in India but eventually around the world – by offering a safe car to people who couldn't otherwise afford one. Ratan Tata, who heads the Tata Group empire, has said he conceived of the idea for a "people's car" after seeing entire families crammed precariously on motorbikes. He decided they deserved a safer, all-weather transport option.
The four-seater can travel up to 65 mph (105 kph) and gets 55.5 miles to the gallon (23.6 kilometers per liter). The Nano does not have air bags or antilock brakes – neither of which is required in India – and air conditioning and power windows are extra.
It has as few moving parts as possible. There's only one windshield wiper, one side mirror and the headrests aren't adjustable. The dinner-plate-sized wheels have three bolts rather than four. The tiny trunk doesn't open; you access it from the inside, behind the rear seats. There are four gears, plus reverse.
The dashboard of the base model has only a speedometer, an odometer and a fuel gauge.
Tata Motors, which also owns Jaguar and Land Rover, plans to start selling versions of the Nano in Europe in 2011, and later in the U.S.
"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."
There are fewer than 30,000 Nanos on the road today, which means that on a percentage basis, the problem rate is fairly high, he said.
"The Nano is a wonderful product, but these incidents really tarnish the image of the car as well as the company," Rathore said. "This is the time for Tata to have a deep look at quality."
He said the company recently made a step in the right direction, hiring Carl-Peter Forster, former head of General Motors in Europe, as group chief executive.
"They've got a guy running the show now who knows how the industry should work," he said. "How soon will the effects be seen across the Tata product range? Well, that will take time."