...love of talking about Nano!
I am not a fanatic for the car per se but am for the principle behind it, for the alternatives Nano provides (still saying that it will be a big hot potato to swallow), the fundamentals it will change, utilitarian concept it embodies and frugal manufacturing technology it testifies. But for the record, I must admit that despite my fears about Nano, Nano is all over my mind. Nano is having an 'in your face' effect on me.
Nano is bound to change our lives and the signs are already showing. Here are some samples.
A recent article in the newspaper prophesied about the peripheral,in several meanings of the word,industries that will flourish in the shadow of Nano. Will not cheap (economical) accessories well embellish a cheap car? It also took a shot at how our conversations and attitudes and jargon would change to accommodate the shifts in paradigms that Nano would trigger. You might say I am progressively becoming a Nano-voce-philic (For good or bad, such people as yours truly like talking about Nano!). Now that is a word I made up. Is there a "Nano" word for someone who makes up Nano words? Nana-verbo-philic, perhaps? If you are getting the hang of it and think I am getting carried away, I have made my point.
If the masses get their bread should the 'nouveau' as well as the 'riche' not get their cakes? Dilip Chabbria has unveiled his impression of a car that could buy a hundred Nanos. Pegged at 1 crore, the rich man's space age answer to Nano will snub the masses with its antiNano philosphy. There in lies the irony: For the rich India, an answer to a frugal car is an extravagant car of similar dimensions with little else in common.
The irony also represents the socio-economic divide that has manifested in different forms in different cities. Be it the Bangalore-commons' quasi-despisal of those working in, literally, glass houses that are IT complexes. Opportunism, crime, harassment and verbal abuse against techies in Bangalore, Pune and other cities. It also shows up in the amplified pillage caused by mobs incited by any issue, the damage in which is mosty incommensurate to what one would expect in response(!) to the problem which triggered it in the first place.
Here is a more significant example of how Nano is raising its hydra-head even before it juggernauts onto the road ten months down the line. Read here about how Nano has upset another automobile manufacturer's grand plans. Electrotherm had a big idea of a small priced AutoRickshaw, but Nano would allow none of it. But as you would have read in the quoted article, ElectroTherm has plans of salvaging their project by converting the prototype into one that is electric and at the same time cheaper. Now, that is innovation driven by market forces. How often do we get witness that so closely and in the live?
We are in exciting times in India and, going by the international pulse, beyond. The show has just began. Nano has just entered the building.
PS: Now, would you call me a Nano-blogo-philic for that matter? Apologies to OUP for misusing the poetic license. For, officially, Oxford has done away with hyphenated words.
Showing posts with label TATA. Show all posts
Showing posts with label TATA. Show all posts
2008-01-17
2008-01-14
Fueled by stupidity, we drive nowhere
An article in today's newspaper talks of certain obscene measures the local goevernment is contemplating in order to 'beat' the traffic woes that bring down every Bangalorean. Let's begin with how well you can recall your car number? Stumped? You will be, when you will need to remember what day it is and match it with the fact whether your car number is odd or even. Am I kidding? Apparently not, according to this article.
This is a clear case of the government trying to pass the buck to the already frustrated commuter of the Silicon Swamp that Bangalore has become. Traveling in your car even on weekends is akin to bicycling through a desert- slow and tiring and it doesn't take you far. After decades of lethargy, lack of planning and conservatism that translated into apathy to infrastructure requirements, the government has given the people of Bangalore what can be considered as an ever-make-shift arrangement around traffic. Caught in the sudden limelight of explosive growth driven by IT and ITeS influx and a never ending scramble between anti-development opposition 'leaders' and pro-development incumbents, the latter fails to deliver anything. Left headless without a government, the local authorities have come up with this stupid solution of letting people drive on alternative days. Some audacity that, taking people of Bangalore for a ride (no pun intended).
But is curtailing people from driving in a city that has no public transportation except bursting-at-the-seams, almost never on time, never ever enough bus system a befitting solution?
Some questions arise. Let's say your car has an even number and an emergency at home requires you to take your car out on a odd-car day. What should you do? Should you be allowed since a life is at risk? How easily can someone not fake an emergency? Would government vehicles be exempt from this rule? If people can be expected to fend for themselves, should the minister not lead the way and travel in a bus?
Why could the government be not thinking of ideas like that implemented in London? Out there, toll zones have been identified and the cars need to pay a steep toll to just drive through congested areas. The presence of technology companies seemed to have made no impact on the retrograde authorities of Bangalore.
The whole plan of alternate-day driving stinks of escapism and will lead to another series of half-hearted attempts to solve the problems that should have been addressed decades ago.
Quality of life in Bangalore in terms of commute is steadily declining with lot of help from the backward-looking attitude and indecisiveness of the powers that be. Impractical suggestions like curbing driving privileges only add insult to injury. Hiding behind the shield of 'it has worked in some European countries' the local bodies seemed to be pleading to be forgiven for failing to come up with practical ideas. This is the cost we pay for throwing out the corporates (PPP) with social-conciousness from the game.
This is exactly when I want to thank Ratan Tata for his Nano. Now, all I need to do is to buy a Nano, get it registered with an even number and I am good to go. I will drive my regular car on Mondays, Wednesdays and Fridays and the Nano on Tuesdays and Thursdays.
Hush, don't tell anyone about the Nano!
This is a clear case of the government trying to pass the buck to the already frustrated commuter of the Silicon Swamp that Bangalore has become. Traveling in your car even on weekends is akin to bicycling through a desert- slow and tiring and it doesn't take you far. After decades of lethargy, lack of planning and conservatism that translated into apathy to infrastructure requirements, the government has given the people of Bangalore what can be considered as an ever-make-shift arrangement around traffic. Caught in the sudden limelight of explosive growth driven by IT and ITeS influx and a never ending scramble between anti-development opposition 'leaders' and pro-development incumbents, the latter fails to deliver anything. Left headless without a government, the local authorities have come up with this stupid solution of letting people drive on alternative days. Some audacity that, taking people of Bangalore for a ride (no pun intended).
But is curtailing people from driving in a city that has no public transportation except bursting-at-the-seams, almost never on time, never ever enough bus system a befitting solution?
Some questions arise. Let's say your car has an even number and an emergency at home requires you to take your car out on a odd-car day. What should you do? Should you be allowed since a life is at risk? How easily can someone not fake an emergency? Would government vehicles be exempt from this rule? If people can be expected to fend for themselves, should the minister not lead the way and travel in a bus?
Why could the government be not thinking of ideas like that implemented in London? Out there, toll zones have been identified and the cars need to pay a steep toll to just drive through congested areas. The presence of technology companies seemed to have made no impact on the retrograde authorities of Bangalore.
The whole plan of alternate-day driving stinks of escapism and will lead to another series of half-hearted attempts to solve the problems that should have been addressed decades ago.
Quality of life in Bangalore in terms of commute is steadily declining with lot of help from the backward-looking attitude and indecisiveness of the powers that be. Impractical suggestions like curbing driving privileges only add insult to injury. Hiding behind the shield of 'it has worked in some European countries' the local bodies seemed to be pleading to be forgiven for failing to come up with practical ideas. This is the cost we pay for throwing out the corporates (PPP) with social-conciousness from the game.
This is exactly when I want to thank Ratan Tata for his Nano. Now, all I need to do is to buy a Nano, get it registered with an even number and I am good to go. I will drive my regular car on Mondays, Wednesdays and Fridays and the Nano on Tuesdays and Thursdays.
Hush, don't tell anyone about the Nano!
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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