A few years back, if someone had said this, one would think that he is planning a day trip by air. With the Golden Quadrilateral in place, today, anyone one who drives down the distance on a car can make the same claim.
In planning for the return leg of our 12 day road trip, we had budget two days (daylight hours) to drive to Mumbai. Some suggested that we should halt at Belgaum, others said Kolhapur or Karad. These suggestions meant that it was assumed that the distance cannot be covered in a regular ‘day’ and that it is not safe (it still is not for many reasons) to drive at night. We also had a baby in tow and driver himself (me!) was expected to tire out by the time he covered about 700 km, professional driver as he is not.
For the record, I should state that I was underestimating my stamina, since I had in the past covered about 1996 miles (~3200 km) in a 96 hour round trip. But that was in the USA. Knowing the Indian road 700 km in a day seemed like a stretch. Obviously, I hadn't done much (or real) highway driving in India, in the last few years. Sure, the car you are driving also makes a lot of difference.
We set out at 6 AM sharp, in light drizzle, with the intent to make the most of daylight hours and cover the 700 KM in about 14 hours. This meant that we expected to do about 50 kmph in terms of real distance covered given the slowing, stopping, halting and simply trying to but not able to really overtake those cluster of trucks aching their way up ghats.
We drove comfortably, stopped to take pictures, lunch, drinks breaks and even a lay-bye power nap of 15 minutes. We were pretty happy that we reached Karad...but at 5:45 PM! At 61 kmph real speed, cruising mostly at 90 kmph, this is pretty neat. I am sure people with turbojet in their blood would be enthused by the prospect to make this distance in less than 10 hours; perilous as it may be. With a couple of hours of daylight still in sight, we drove on and reached Pune (880 KM) by 8:30 PM (same average even through a small stretch of ghat in 14.5 hours). Finally, we took another 2.5 hours to reach Mumbai (Pune-Mumbai on the expressway is another superb ride), yielding 1000 km in 17 hours. Late dinner in Mumbai meant that we actually saved a day on road. It is another matter that this upset my wife since she thinks I short-changed her by cutting short the vacation. (I know I will pay a price for this someday soon.)
Driving on NH4 is like jet skiing. As of this writing, NH4 is complete from Bengaluru through Pune barring a 15 km bye-pass of Ranebennur, which means you go through the town. One does not mind shelling out about 500 bucks in toll (they call it "road user fee") through the entire route. This segment of the Golden Quadrilateral is very well built and maintained. Some oddities remain- like people and animals crossing roads like they are walking in their backyard, but that’s a reality on every highway in India, no matter how wide or smooth it is and whether or not you pay toll.
The Mumbai-Pune expressway (alternative to NH4) is a wonderful exception to this rule. It is a great feeling driving through gargantuan tunnels (longest is about 1.5 km long) with three lanes and high ceilings, well lit in vibrant orange neon. In fact, watching three lanes of traffic zooming through tunnels in India is a first for me. Truck drivers need to yet learn how to use the Mumbai-Pune expressway. We saw at least five overturned trucks of all sizes- even 10-wheelers- belly-up on relatively sharp turns. Simply, they were just too fast and the guys probably ignored the warnings to slowing down. (There could be an arguable point about designing turns on expressways, but I will give engineers the benefit of doubt on this one)
It is not without reason that the entire NH4 (I am sure rest of GQ as well) carries frequently seen hoardings of the ruling Congress leaders. The GQ is indeed something to be proud of. It has phenomenal implications to the logistics, particularly, road transport industry. Fast road travel implies higher efficiency of transport vehicles; higher predictability through better planning; faster supply chains; development of storage and specialised infrastructure in ‘outer’ locations (where it would be cheaper) and overall economic savings. For personal travel as well, roads like GQ open up a safer option to travel by own cars (or bikes for those who prefer).
Bengaluru to Mumbai on road- all in a day’s work. Hadn’t thought of it that way, until yesterday.
Showing posts with label Auto-Industry. Show all posts
Showing posts with label Auto-Industry. Show all posts
2010-03-07
Recalling brand stories
Brands are like friends, good friends are honest and don't let friends down. This is, in brief, one of the points that Professor Abraham Koshy (
Read Profile ) made in his recent article on ET(Read Here).
Maruti-Suzuki A-Star's is an apt caselet for brand crisis prevention. Maruti-Suzuki's major, even if not the first, recall highlights the sea change in how Indian producers treat their consumers.
But when did Indian brands, let's say specifically, Indian automobile brands become good friends of the consumer?
One of the key effects of our open market economy in automobile industry is that Indian players are no more taking consumers for granted. Faced with powerful peers who are quality conscious, responsible and honest, Indian producers have learned that for them "it 's the right way, or the highway". It was also probably the oft blamed Indian 'chalta hai' attitude coupled with the existence of seller's market for a long time, that had led to manufacturers' propensity to ignore issues that bothered consumers.
In 1999, I purchased Enfield's first aluminium-engine bike called Machismo A350. The bike suffered from noisy valves that chattered wildly. But Enfield did nothing despite complaints and the bike failed miserably. New avatars of the bike emerged a couple of years later, but many were left holding lemons.
Then, take for example, Bajaj Chetak's famous 'tilting of the scooter' trick. Unless the scooter was tilted at a difficult angle, known only to an owner, the fuel wouldn't start flowing. I remember seeing this growing up in the '80s, when scooters ruled, as well as in the mid 2000s, when aerodynamic bikes whizzed past the humble scooter. Everyone knew it was a fuel problem (you did not see it in other scooters, by the way). But Bajaj did nothing, apparently, to fix the problem for 20 odd years. I guess after some time the tilting became an ownership statement, a romantic one at that. And Bajaj could probably get away because of the strong heritage value. A Bajaj scooter offered mass consumer value on which India rode for a few generations.
But at some point in time between the 90s and early 2000s two things overtook the Bajaj scooter phenomenon. First, were the Bajaj bikes, which themselves were a response to the flood of 100 cc bikes that, to name the pioneers, Hero Honda and TVS Suzukis had caused. The second was the shifting consumer preference. Who cared for a technologically stagnant product when there were so many options available? Pick up any auto magazine and see how many pages the bikes table, already written in small sized font, runs into. So, is this one of the reasons why the Bajaj scooter was put to rest?
Today, however, it is the buyer's market. Consumerism, aided by information-empowerment in the background of open competition has helped clean up the manufacturer's act and enabled consumer to 'unfriend' the brands she cannot trust.
Read Profile ) made in his recent article on ET(Read Here).
Maruti-Suzuki A-Star's is an apt caselet for brand crisis prevention. Maruti-Suzuki's major, even if not the first, recall highlights the sea change in how Indian producers treat their consumers.
But when did Indian brands, let's say specifically, Indian automobile brands become good friends of the consumer?
One of the key effects of our open market economy in automobile industry is that Indian players are no more taking consumers for granted. Faced with powerful peers who are quality conscious, responsible and honest, Indian producers have learned that for them "it 's the right way, or the highway". It was also probably the oft blamed Indian 'chalta hai' attitude coupled with the existence of seller's market for a long time, that had led to manufacturers' propensity to ignore issues that bothered consumers.
In 1999, I purchased Enfield's first aluminium-engine bike called Machismo A350. The bike suffered from noisy valves that chattered wildly. But Enfield did nothing despite complaints and the bike failed miserably. New avatars of the bike emerged a couple of years later, but many were left holding lemons.
Then, take for example, Bajaj Chetak's famous 'tilting of the scooter' trick. Unless the scooter was tilted at a difficult angle, known only to an owner, the fuel wouldn't start flowing. I remember seeing this growing up in the '80s, when scooters ruled, as well as in the mid 2000s, when aerodynamic bikes whizzed past the humble scooter. Everyone knew it was a fuel problem (you did not see it in other scooters, by the way). But Bajaj did nothing, apparently, to fix the problem for 20 odd years. I guess after some time the tilting became an ownership statement, a romantic one at that. And Bajaj could probably get away because of the strong heritage value. A Bajaj scooter offered mass consumer value on which India rode for a few generations.
But at some point in time between the 90s and early 2000s two things overtook the Bajaj scooter phenomenon. First, were the Bajaj bikes, which themselves were a response to the flood of 100 cc bikes that, to name the pioneers, Hero Honda and TVS Suzukis had caused. The second was the shifting consumer preference. Who cared for a technologically stagnant product when there were so many options available? Pick up any auto magazine and see how many pages the bikes table, already written in small sized font, runs into. So, is this one of the reasons why the Bajaj scooter was put to rest?
Today, however, it is the buyer's market. Consumerism, aided by information-empowerment in the background of open competition has helped clean up the manufacturer's act and enabled consumer to 'unfriend' the brands she cannot trust.
2008-01-10
El Nano Effect
Catapulting itself into the league of world-changing automobiles, Nano has rolled out of the portals of Tata Motors. Unveiled earlier today,apparently, to a roaring welcome, Nano will change India and in a way that will impact us for a long time to come.
With a lot of scepticism about the way this car will change Indian way of life, I had tried to surmise (read here and here) that India and Indians will come under a lot of pressure when this dream car becomes a reality. Saying something to the effect of 'a promise is promise' Ratan Tata has delivered a mean-mini-machine at an unprecedented and mere USD2700 unit price. Any doubts about India's technology around frugal manufacturing will be put to rest today, once the pictures start flashing around the car markets of the world; to be eventually buried when the car proves its performance on the road over the next few months.
Giving an unparalleled 50 Mile Per Gallon (test conditions?) for a petrol driven car with contemporary looks, Nano, will probably capture the imagination, interest and pockets of millions upon millions of Indians and other third-world-ians. At the same time it will set, if it proves true, new benchmarks. I am doubtful about this last part since the basic tenet of Nano has been to be a cheap car; no great shakes about creating a lean-burn technology.
However, the little beauty, on the face of it, has much to offer. Tata's ever expanding dealer and service network will carry this car into the remotest corners of the country. That is a big problem, because this car will also probably spread in the urban landscape like a forest fire. And when that happens, every square inch of tarmac on our narrow deficient streets will cry for mercy and the people behind wheels beg for redemption. Well, that may be a little too dramatic, but the fact remains that if this car succeeds the way it ought to for TATAs to breathe easy and the way it looks ready to, Indian way of traffic management, infrastructure support in terms of roads, bridges and parking space will first collapse, then taking us through months and years of failure, regret and disillusionment, deliver us to something innovative.
I have very little faith left in me about how Bangalore will survive the deluge (just wait and watch) that Nano will unleash. Nano will change our lives by challenging the administration to better itself.
Since road will be so packed, is this the right time to think about a cheap helicopter, may be for for a million rupees or two. Meanwhile get ready to face a huge demand-supply crack in petrol once the millions among us get enticed by the economy-dream-come-true Nano. Small Car.Big dreams.Bigger Pains.
Nevertheless the boldness behind a concept-realised, yet to be tested on road, is commendable.
Watch videos here.
See pictures here.
Tata Small Car Website is here
With a lot of scepticism about the way this car will change Indian way of life, I had tried to surmise (read here and here) that India and Indians will come under a lot of pressure when this dream car becomes a reality. Saying something to the effect of 'a promise is promise' Ratan Tata has delivered a mean-mini-machine at an unprecedented and mere USD2700 unit price. Any doubts about India's technology around frugal manufacturing will be put to rest today, once the pictures start flashing around the car markets of the world; to be eventually buried when the car proves its performance on the road over the next few months.
Giving an unparalleled 50 Mile Per Gallon (test conditions?) for a petrol driven car with contemporary looks, Nano, will probably capture the imagination, interest and pockets of millions upon millions of Indians and other third-world-ians. At the same time it will set, if it proves true, new benchmarks. I am doubtful about this last part since the basic tenet of Nano has been to be a cheap car; no great shakes about creating a lean-burn technology.
However, the little beauty, on the face of it, has much to offer. Tata's ever expanding dealer and service network will carry this car into the remotest corners of the country. That is a big problem, because this car will also probably spread in the urban landscape like a forest fire. And when that happens, every square inch of tarmac on our narrow deficient streets will cry for mercy and the people behind wheels beg for redemption. Well, that may be a little too dramatic, but the fact remains that if this car succeeds the way it ought to for TATAs to breathe easy and the way it looks ready to, Indian way of traffic management, infrastructure support in terms of roads, bridges and parking space will first collapse, then taking us through months and years of failure, regret and disillusionment, deliver us to something innovative.
I have very little faith left in me about how Bangalore will survive the deluge (just wait and watch) that Nano will unleash. Nano will change our lives by challenging the administration to better itself.
Since road will be so packed, is this the right time to think about a cheap helicopter, may be for for a million rupees or two. Meanwhile get ready to face a huge demand-supply crack in petrol once the millions among us get enticed by the economy-dream-come-true Nano. Small Car.Big dreams.Bigger Pains.
Nevertheless the boldness behind a concept-realised, yet to be tested on road, is commendable.
Watch videos here.
See pictures here.
Tata Small Car Website is here
2007-08-17
Would you buy a OneLakhCar? (Part-2)
What if the OneLakhCar were to become popular?
Nightmare! I am not saying everyone should not have a car. I am just surmising about what will happen if they do. Are were prepared for it at any level? There are several ways to slice this issue. Here are some that came to my mind.
Roads: Indian cities are not built to accommodate so many cars, not so soon at least. And cities like Bangalore, definitely not, with chock-a-block two-lane roads, piled-up four-lane ones. Mayhem will be an understatement for what we will witness. As if autorickshaws are not a menace enough that we need more of such devilish vehicles. Come to think of it, the economy of a OneLakhCar (A Bajaj 3-wheeler costs 1.75 lakhs on road) combined with the promise of a 5-seat capacity, might just mean we will see the end of these reckless rattlers which are nothing but necessary evil. This is probably the only positive outcome of the OneLakhCar.
Traffic Indiscipline: Not all people who drive cars can ride bikes, probably because they never learnt to ride a bicycle (basic reason, reasons of relative safety keeps many off the roads). People who might otherwise not have driven because they could only afford a bike they could not ride, will be more inclined to drive. So, we will see more new drivers. For Indian drivers 'Driving is a privilege not a right' are words lost in the din. One can get a license to drive a car if he has a couple of hundred bucks in his pocket. With such abysmal regulation on who is given license to drive, the potential havoc caused by millions of more car drivers on roads leaves little to imagination.
Parking space and its effect on real estate: Go to the 'downtown' areas in any of the cities and you will notice that we just do not have the space to keep these cars. Even now, parking is not very economical, if available at all. Not just commercial parking, but personal parking too is important. How many of the builders with 600 apartments or more in a compound have actually planned for a car in every family? With such need for parking space, real estate prices will move north.
Environmental concerns: Emission levels will probably be low for a small engine like that of OneLakhCar's but only if the right fuel is used and the car is regularly tuned and maintained. What if adulterated and mixed (for economic benefit) fuel is used? People do it with a 1.75 Lakh rickshaw. Will they refrain from experimenting on a 1 Lakh Car? Pollution control is not as strictly enforced as required, except probably in the National Capital Region.
How will these cars be recycled (they will need to be at some point in time)? Most of the junked cars end up being cannibalised for spare parts (legal only in some cases) or their metal parts being melted and recycled. What will you do with millions of tonnes of composite frames and bodies of the OneLakhCars? Bio-degradable waste is itself difficult to dispose (for reasons of volume), where will we find space to dump composite bodies?
More cars, more green house emissions, more global warming. This outcome was always expected, but the OneLakhCar will only accelerate this process. No, I am not saying people should stop buying cars. Technologically advanced those maybe, but five times as many cars as in India are sold in the US itself. Why should Indians not be buying them? Fair, if India were not per-capita a 9th the size of the US. The thought that one million cars will be sold every year is mindboggling. Current annual car sales in India stand at about 600,000; there will be three times as many cars getting into Indian roads every year, if the TATAs meet their target.
Two-wheeler business will be worst hit, as repeat bike buyers are expected to be converted in to car buyers. Heavy pressure to push prices and costs down will only lead to planned declines in production of bikes and it will be no surprise if other companies too convert their facilities to make variants of the OneLakhCar. Renault has plans to bring out the $3000 car with Bajaj auto (talks with M&M fell through). The Renault car will be probably be more advanced than OneLakhCar in terms of safety as it has a higher tag.
In principle, Ratan Tata's dream of getting a car into every home may turn out to be a pyrrhic victory. The economical car may come at a big price for India in the long run. Rise in standard of living of socio-economic categories, as my untrained-in-economic-theories-mind perceives happens when the affordability of goods increases based on true increase in income to reach that level of affordability not when the level of affordability is brought down to existing levels of income. Commoditisation happens when the latter phenomenon is brought about. In a gimpy infrastructure, only the load on the system increases when commoditisation happens in items such as cars.Were these cars special in terms of environment-friendly technology such as electric or solar, the argument could have been reversed. Apparently, they are not.
Maybe I am being simply too biased against this car for some paranoia I cannot explain. Maybe it will not be so bad after all. Maybe I have not fathomed the adapting power of the Indian system. Then maybe, I am just dreaming!
What if the OneLakhCar were to become popular?
Nightmare! I am not saying everyone should not have a car. I am just surmising about what will happen if they do. Are were prepared for it at any level? There are several ways to slice this issue. Here are some that came to my mind.
Roads: Indian cities are not built to accommodate so many cars, not so soon at least. And cities like Bangalore, definitely not, with chock-a-block two-lane roads, piled-up four-lane ones. Mayhem will be an understatement for what we will witness. As if autorickshaws are not a menace enough that we need more of such devilish vehicles. Come to think of it, the economy of a OneLakhCar (A Bajaj 3-wheeler costs 1.75 lakhs on road) combined with the promise of a 5-seat capacity, might just mean we will see the end of these reckless rattlers which are nothing but necessary evil. This is probably the only positive outcome of the OneLakhCar.
Traffic Indiscipline: Not all people who drive cars can ride bikes, probably because they never learnt to ride a bicycle (basic reason, reasons of relative safety keeps many off the roads). People who might otherwise not have driven because they could only afford a bike they could not ride, will be more inclined to drive. So, we will see more new drivers. For Indian drivers 'Driving is a privilege not a right' are words lost in the din. One can get a license to drive a car if he has a couple of hundred bucks in his pocket. With such abysmal regulation on who is given license to drive, the potential havoc caused by millions of more car drivers on roads leaves little to imagination.
Parking space and its effect on real estate: Go to the 'downtown' areas in any of the cities and you will notice that we just do not have the space to keep these cars. Even now, parking is not very economical, if available at all. Not just commercial parking, but personal parking too is important. How many of the builders with 600 apartments or more in a compound have actually planned for a car in every family? With such need for parking space, real estate prices will move north.
Environmental concerns: Emission levels will probably be low for a small engine like that of OneLakhCar's but only if the right fuel is used and the car is regularly tuned and maintained. What if adulterated and mixed (for economic benefit) fuel is used? People do it with a 1.75 Lakh rickshaw. Will they refrain from experimenting on a 1 Lakh Car? Pollution control is not as strictly enforced as required, except probably in the National Capital Region.
How will these cars be recycled (they will need to be at some point in time)? Most of the junked cars end up being cannibalised for spare parts (legal only in some cases) or their metal parts being melted and recycled. What will you do with millions of tonnes of composite frames and bodies of the OneLakhCars? Bio-degradable waste is itself difficult to dispose (for reasons of volume), where will we find space to dump composite bodies?
More cars, more green house emissions, more global warming. This outcome was always expected, but the OneLakhCar will only accelerate this process. No, I am not saying people should stop buying cars. Technologically advanced those maybe, but five times as many cars as in India are sold in the US itself. Why should Indians not be buying them? Fair, if India were not per-capita a 9th the size of the US. The thought that one million cars will be sold every year is mindboggling. Current annual car sales in India stand at about 600,000; there will be three times as many cars getting into Indian roads every year, if the TATAs meet their target.
Two-wheeler business will be worst hit, as repeat bike buyers are expected to be converted in to car buyers. Heavy pressure to push prices and costs down will only lead to planned declines in production of bikes and it will be no surprise if other companies too convert their facilities to make variants of the OneLakhCar. Renault has plans to bring out the $3000 car with Bajaj auto (talks with M&M fell through). The Renault car will be probably be more advanced than OneLakhCar in terms of safety as it has a higher tag.
In principle, Ratan Tata's dream of getting a car into every home may turn out to be a pyrrhic victory. The economical car may come at a big price for India in the long run. Rise in standard of living of socio-economic categories, as my untrained-in-economic-theories-mind perceives happens when the affordability of goods increases based on true increase in income to reach that level of affordability not when the level of affordability is brought down to existing levels of income. Commoditisation happens when the latter phenomenon is brought about. In a gimpy infrastructure, only the load on the system increases when commoditisation happens in items such as cars.Were these cars special in terms of environment-friendly technology such as electric or solar, the argument could have been reversed. Apparently, they are not.
Maybe I am being simply too biased against this car for some paranoia I cannot explain. Maybe it will not be so bad after all. Maybe I have not fathomed the adapting power of the Indian system. Then maybe, I am just dreaming!
2007-08-16
Would you buy a OneLakhCar? (Part-1)
TATAs are not blusterers and they have delivered in the past. Making it the 3rd largest player, TATA Motors has 17% marketshare in passenger car segment. Tata Motors has never had it this good in the last few years despite general declining sales in auto industry, commercial included. TATA Ace has bridged the gap of the 'perfect vehicle' for last-mile logistics, with its 1-tonner 'tempo' which is selling like hot cakes. Ace's commercial passenger cousin 'Magic' is similarly expected to set tracks on fire . One last tidbit: in commercial segment, TATAs have a whopping 65% share. Having put them in this perspective, it would be goosey to say TATAs have not read the market.
But in an upwardly mobile middle class, would a 1 Lakh Car be popular?
There are many dimensions one must consider before answering the question. Living in a city and seeing more and more newly-introduced models from Hyundai, Honda, Corolla, GM, Ford and MUL swoosh by on urban roads (I believe there is deep but random penetration in villages too), I have my reservations about this car. Rural market might be the target, but if the OneLakhCar is competing with Maruti800, one must take into consideration that the latter has seen steady decline in sales even in rural markets in the last two years.
When MUL came out with the original Maruti-Suzuki in the 80s, indeed, the objective was to bring home an affordable car for the common man and a 1 Lakh (or so) tag was acceptable at the time. And what a car it was with original Japanese engine and know-how! The bean car brought in a technological leap in auto industry. None of the indigenously built cars could match up to what Maruti-Suzuki offered. Be it size-wise performance, maintenance or economy of ownership. There is little that needs to be said about MUL's success. So, the idea behind Maruti was a noble one, if you know what I mean.
In principle, the intent behind the OneLakhCar seems to be less nobler (for lack of another term). Affordability seems to be the only criterion for this car. Of course, the TATA quality and brand will assure that the car is not made with cheap parts (brand equity based assumption), but price seems to be the only basis for differentiation, something that will not incite enthusiasm in every buyer.
To push down costs, there are bound to be compromises (within the realm of TATAs brand equity). Component manufacturers have invested capital hedging on the success of the car. Metal costs only rising, the body of the car is said to be of composite material rather than steel or aluminium. (This has been done before- the most elegant example being the sexy Corvette. But hey, they may not use the same stuff here!)Unofficial estimates put the margin-to-manufacturer at Rs.5000 per car. Further, based on work done by analysts, having invested Rs.6000 Crores, TATAs have to sell 1 million cars every year (and they plan to) for four years to break even. Is this possible?
Recent announcement that by year 2009, air-bags in new passenger cars will be no more optional but factory-fitted-mandatory, it is worth asking if the OneLakhCar has this cost built in. Or will it only be 1 Lakh ex factory? Costs toward Bharat IV and EURO III norms would no doubt have been built in.
What about the design? Speculation is rife on whether the car will be a Reva look-alike, Mini-Indica(!) or the Lankan MiniCar (a rounded Reva, I found out after some Googling). Whatever it is, on a 600cc engine, one cannot expect a huge frame. Then how will it be a four or five seater? I secede, I am not design-savvy.
There is a growing need for mobility given the changing lifestyles and lame public transport. The culture of using public transportation is slumping for several reasons, affordability not being the least of them. Mobikes and scooties if not cars fill parking lots of colleges and sometimes schools. The average price of mobikes has crossed Rs.50K, and that of high end indigenous bikes is closing in to Rs. 1 Lakh. Relative safety considerations and the aspirational value of a car would thereby sway a first time buyer or a two-wheeler owner toward the OneLakhCar.
So, there is a reasonable chance that the car will be popular since there is a huge market out there. And there is no offering in this segment right now.
(Coming up...what will happen if the OneLakhCar does its magic.)
TATAs are not blusterers and they have delivered in the past. Making it the 3rd largest player, TATA Motors has 17% marketshare in passenger car segment. Tata Motors has never had it this good in the last few years despite general declining sales in auto industry, commercial included. TATA Ace has bridged the gap of the 'perfect vehicle' for last-mile logistics, with its 1-tonner 'tempo' which is selling like hot cakes. Ace's commercial passenger cousin 'Magic' is similarly expected to set tracks on fire . One last tidbit: in commercial segment, TATAs have a whopping 65% share. Having put them in this perspective, it would be goosey to say TATAs have not read the market.
But in an upwardly mobile middle class, would a 1 Lakh Car be popular?
There are many dimensions one must consider before answering the question. Living in a city and seeing more and more newly-introduced models from Hyundai, Honda, Corolla, GM, Ford and MUL swoosh by on urban roads (I believe there is deep but random penetration in villages too), I have my reservations about this car. Rural market might be the target, but if the OneLakhCar is competing with Maruti800, one must take into consideration that the latter has seen steady decline in sales even in rural markets in the last two years.
When MUL came out with the original Maruti-Suzuki in the 80s, indeed, the objective was to bring home an affordable car for the common man and a 1 Lakh (or so) tag was acceptable at the time. And what a car it was with original Japanese engine and know-how! The bean car brought in a technological leap in auto industry. None of the indigenously built cars could match up to what Maruti-Suzuki offered. Be it size-wise performance, maintenance or economy of ownership. There is little that needs to be said about MUL's success. So, the idea behind Maruti was a noble one, if you know what I mean.
In principle, the intent behind the OneLakhCar seems to be less nobler (for lack of another term). Affordability seems to be the only criterion for this car. Of course, the TATA quality and brand will assure that the car is not made with cheap parts (brand equity based assumption), but price seems to be the only basis for differentiation, something that will not incite enthusiasm in every buyer.
To push down costs, there are bound to be compromises (within the realm of TATAs brand equity). Component manufacturers have invested capital hedging on the success of the car. Metal costs only rising, the body of the car is said to be of composite material rather than steel or aluminium. (This has been done before- the most elegant example being the sexy Corvette. But hey, they may not use the same stuff here!)Unofficial estimates put the margin-to-manufacturer at Rs.5000 per car. Further, based on work done by analysts, having invested Rs.6000 Crores, TATAs have to sell 1 million cars every year (and they plan to) for four years to break even. Is this possible?
Recent announcement that by year 2009, air-bags in new passenger cars will be no more optional but factory-fitted-mandatory, it is worth asking if the OneLakhCar has this cost built in. Or will it only be 1 Lakh ex factory? Costs toward Bharat IV and EURO III norms would no doubt have been built in.
What about the design? Speculation is rife on whether the car will be a Reva look-alike, Mini-Indica(!) or the Lankan MiniCar (a rounded Reva, I found out after some Googling). Whatever it is, on a 600cc engine, one cannot expect a huge frame. Then how will it be a four or five seater? I secede, I am not design-savvy.
There is a growing need for mobility given the changing lifestyles and lame public transport. The culture of using public transportation is slumping for several reasons, affordability not being the least of them. Mobikes and scooties if not cars fill parking lots of colleges and sometimes schools. The average price of mobikes has crossed Rs.50K, and that of high end indigenous bikes is closing in to Rs. 1 Lakh. Relative safety considerations and the aspirational value of a car would thereby sway a first time buyer or a two-wheeler owner toward the OneLakhCar.
So, there is a reasonable chance that the car will be popular since there is a huge market out there. And there is no offering in this segment right now.
(Coming up...what will happen if the OneLakhCar does its magic.)
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