On wheels!

It all began with the unfolding of the Small Indian Dream, errr... the Small Indian Dream ‘Car’ – Tata’s Nano at the national capital on January 10, 2008 (a day after the Sensex closed at a magical of 20,873.33 points; what a coincidence!). Yes, the launch of the Nano received great media attention and the country was abuzz with expectations galore for a car that would revolutionise and expand the automobile industry in India, create numerous job and export opportunities, and in the end, boost GDP for the growing economy. For a year that didn’t see many successful innovative disclosures, Ratan Tata flagged off the year on a great note for India Inc.

But of course, as hurdles only love the brave, the Nano received lashes from policy makers, therefore forcing Tata to shift its ‘mother-plant’ focus from Singur (in WB) to Sanand (in Gujarat). It is currently reported that Tata Motors is producing the Nano from its existing Pantnagar plant (in Uttarakhand), in volumes that of course would multiply manyfold once the mother-plant is in place (which is expected to touch about 5,00,000 units annually). So what makes the Nano revolutionary? Well, it is so for both the consumers and producers alike. The Nano is a car so affordable that it will most definitely change the prevailing competitive conditions in the four-wheeler market, potentially making Tata Motors the number one player in the Indian market by volumes, what with even the 2008 budget reducing excise duty on small cars by nearly 4% to make them ‘more’ affordable! Today, even though Maruti remains the undisputed messiah for the 300 million-strong middle-class Indians, the Nano is only waiting to make its way into many garages! So is Maruti feeling threatened by the Nano? “I think we should let the Nano come into the market first and then we will see,” replied a candid R. C. Bhargava, Chairman, Maruti Suzuki India. Well, he didn’t say yes yet, did he? So finally, does the Nano launch deserve the first ‘Super Six’ title? Well, for the numbers, last year alone, the two-wheeler segment recorded a growth of 38% with at least 700,000 two-wheelers sold. Wouldn’t they prefer a car, with a just few thousand rupees extra?! Yezdi Nagporewalla, Analyst, KPMG agrees, “In volumes the motorbike segment is 7 million units strong and the competition from Tata’s Nano and others will be around 1 million units.” Interestingly, that’s a big number. Here’s a cheers to the number one Super Six of 2008!

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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