Ratan Tata, the chairman of India's largest business group, is no car freak. His small, utilitarian office in downtown Bombay is decorated with model aircraft: jets, helicopters, even a miniature space shuttle, but no cars. The closest thing in his private garage to an aficionado's possession is a metallic-red Chrysler Sebring convertible--which he rarely drives because a) until recently, he was subject to death threats and b) he worries that vandals may scratch the paintwork.

How ironic, then, that his reputation--and that of the vast business empire he heads--rides on a car. Indica, a 1.4-liter hatchback from group flagship Tata Engineering & Locomotive Co. (Telco), is due to hit the roads in December. It will mark Tata's debut in the car market--and the most high-profile product launch in the chairman's seven years at the helm. Tata, 60, has spent much of that time in the backroom, restructuring and consolidating the empire. The Indica will be his first real test in the marketplace.

The car, unfortunately, arrives at a particularly inopportune time. The Indian economy has hit the skids, with growth likely to fall to 5% this year from 7% in 1995. Profits are down sharply at most of the Tata group's 80-odd companies (total 1997 sales: $8.4 billion). The car market has stalled at around 400,000 units a year; previous projections of a million-car market by the turn of the century now seem wildly exaggerated. The small-car segment is likely to grow just 2% this year, and it is becoming highly congested. Fiat, Hyundai and Daewoo have launched hatchbacks this year, while Opel, Ford and Daihatsu are expected to start local production in 1999. Market leader Maruti Udyog, meanwhile, has launched an aggressive advertising and sales campaign to protect its 83% share.

In that context, the Indica represents India Inc.'s fight against the serried ranks of multinationals that rushed in when the country opened its doors to foreign investment in 1991. The newcomers won the early battles: India's largest soft-drink maker chose to sell out to Coca-Cola rather than fight it; car-makers Hindustan Motors and Premier Automo-biles formed joint ventures with Opel and Peugeot. Many pundits blessed these marriages of convenience as wise, defensive options. Tata, too, adopted such a strategy in areas as diverse as computers (where he joined forces with IBM) and luxury cars (with Daimler-Benz). But he believes he can stand alone in the small-car market. "If Ratan Tata can't, who can?" asks Bombay financial consultant Sanjay Bhattacharya.

Despite such praise, Tata's efforts to capitalize on India's liberalized economy haven't gone smoothly. He's not alone: other leading Indian business families like the Birlas, Modis and Singhanias have seen their fortunes fade because they responded too slowly to a changing environment. Tata's big-ticket joint ventures with Bell Canada International in telecoms, American Insurance Group of the U.S. in insurance and British Petroleum in oil exploration haven't amounted to much. The telecoms venture, for example, has won little more than a license to provide cellular-phone services in Andhra Pradesh. Tata, who is a licensed pilot, also hoped to launch a domestic airline in partnership with Singapore Airlines. New Delhi shot that down, arguing that the venture was not "in the national interest."

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