Tata Motors is part of the Tata Group - one of the most important industrial conglomerates to have developed in emerging market countries. It has started to build the Nano - a car that sells for around £1300 and is reputedly one of the world’s cheapest motor vehicles. Tata also moved into the luxury market in 2008 when it bought Jaguar Land Rover from Ford for $2.3bn. This BBC report looks at the latest profits news from Tata. Tata has said it will eventually make 500,000 Nanos a year.

Outline some of the economies of scale that can be exploited by producing such a huge volume of cars Draw an appropriate cost diagram to show what might happen to Tata Motors’ long run costs of production What factors will influence the level of market demand in India for their Nano vehicle?

Click here for BBC news articles on Tata