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Evolution of the Indian Luxury Market

March 30, 2011

Analysis of:Luxury: Why China Beats India | blogs.wsj.com

After enduring three centuries of foreign domination, plundering of its natural resources, and the consequent widespread poverty, India now has a rapidly growing and aspirational middle class. The market for luxury goods is thus still in its initial stages, but its accelerating growth will be clear to anyone who studies the drivers of the trend towards luxury products.

The beginnings of a transition?

December 23, 2009

Analysis of:Magna, Canada team up on auto research center | www.reuters.com

The article raises several questions and leaves one with an inadequate data base for any meaningful analysis. Consequently, any comments can only be on the basis of a hypothesis, and therefore more by way of a possible scenario rather than an actual analysis of this decision.What is curious is the small size of the investment involved, and the fact that there will be 3 players,viz. Magna,the Canadian Government,and the small plastics manufacturers.

The danger of formula analyses!

November 7, 2009

Analysis of:The Cognac Queen | www.telegraph.co.uk

The world is intellectually lazy, so it is always looking for 'quick-fixes'and one line answers. Management is one area where such placebos are often handed out by our global gurus!If you think about it,however, it is individual thinking, individual perceptions, and individual relationships with the world around them that brings success to such managers. Without such a unique combination of attributes, coupled with a particular situation at a particular point of time, spectacular success would not happen.The success I acknowledge,however, is the success of gurus who piggy-back on such stories to win personal success and acclaim!

Impact of Indian markets on Vehicle design.(Inapex Pvt.Ltd)

October 1, 2009

Analysis of:Muzzling the Guzzlers: High Gas Prices Drive Effort to Remake SUVs | online.wsj.com

With the rapid growth of the vehicle market in India, the need to factor in the design features based on demand here will grow. The need to reduce weight and cost will also be driven by the growing demand for low pollution engines and relevant product features.

Recognising a basic shift in the labour market.

September 30, 2009

Analysis of:GM, Reva tie up for electric vehicles | www.business-standard.com

It seems that light has begun to dawn on the GM top management!They are now correctly focussing on two long term trends:1.The shift from conventional cars to electrics and hybrids,and2.The progressive upgradation of labour intensive Asian markets to high technology- intensive ones.

China's Geely & Beijing Automotive announce their ambitions !

September 23, 2009

Analysis of:China’s Geely, Beijing Automotive Target Volvo, Saab | www.bloomberg.com

1.These bids clearly show that these manufacturers have Europe in mind as a future market in the future.2.The best way to really acquire technology is to acquire the company where this resides- hence the bid.

At what cost,and for how long can you keep uncompetitive jobs?

July 9, 2009

Analysis of:Economics Wasn't GM's Only Criteria for New Plant | online.wsj.com

GM faces a dilemma that BMC faced in Great Britain before its demise. Mrs. Thatcher pointed out at that time that the cost of keeping BMC going over some years would have covered the cost of gifting every UK citizen a free car! Even a small car specialist like Suzuki of Japan has shifted production of its 800cc & 1litre cars to India, from where it is exporting them to Europe and Latin America. Therefore GM needs to think this through very carefully.

Massive acquisition sprees - driven by hubris?

February 9, 2009

Analysis of:Tata Motors in reverse gear on vendor payment issues | economictimes.indiatimes.com

If one looks at recent corporate history, it is replete with instances of very good,focussed companies being brought to their knees by over optimistic mergers and acquisitions. The merger of Citi and Travellers to form Citigroup was originally hailed as a stroke of genius and is now being cited as a classic case of overreach ! Likewise, the TATA's, one of India's finest companies find themselves struggling with absorbing the effects of the current downturn as well as meeting their financial commitments from the Jaguar-Landrover buyout.

The need to rethink the US Big 3 strategy.

November 24, 2008

Analysis of:If Detroit Fails, Foreign Makers Could Be Buffer | www.nytimes.com

At the political level, it is clear that closing GM,Ford,& Chrysler is not an option. It is also clear that,should this happen, the foreign owned US plants could step in and close the supply gap, and also recreate a fair percentage of the jobs lost as a consequence of these closures. However,the relocation of employment that this would involve as well as the time lag before this would take effect, would create unacceptable social stresses and great hardship for the many individuals involved. Therefore, the simplistic solution offered to US lawmakers - bail us out! Actually the problem is different - the current top management and their mindsets which are still rooted in the good old days when the US auto industry ruled the world. The real need is to completely revamp the top managements - not close the companies.

India is the next frontier for kei cars

October 31, 2008

Analysis of:Rethinking the tiniest class of car | search.japantimes.co.jp

As the TATA Nano has vividly demonstrated, the time for a frugal car has arrived. A number of Nano competitors are under active development in India and the market for them is bound to explode as soon as they hit the market. The interesting thing is that these are all being designed and developed in India for the Indian market, but they all have global ambitions as well. Tough targets have been set for the Indian design teams for keeping purchase as well as operating costs minimal.If these targets are met, they are bound to be hits as they eat into the current 2 wheeler market in India which is around annual sales of 10 million bikes/mopeds/scooters. From all reports, this is causing concern and some trepidation in US and European markets as the financial meltdown continues to impact the current range of cars in those markets.

Downsize a company?Begin with top management!

October 24, 2008

Analysis of:GM, Ford SharesHit New Lows As Sentiment Fades Further | online.wsj.com

Watching the performance of the biggest US &European companies from Asia over the years has amazed me how no one ever seems to question the levels of management at which major goof ups are made. Though US industry in general was critical when Roger Smith retired from GM leaving it in a major mess,but with his golden parachute intact,no one seemed to follow up or question him about it. In Europe, Barnevik was hailed as the poster boy who turned around ABB by axing many jobs, but no one really called anyone to account for why they reached that situation in the first place. Business cycles occur regularly,so it is well known that the personnel needs of any business will vary in consonence with them. Yet we seem to return to "first hire and then fire" policies repeatedly with little innovation or new ideas on how to manage this better.  The lowest echelons feel all the pain,while the top walks away with the kudos and the cash bonuses!Are Board/shareholders seeking to change this?

It seems the future of EVs is here!

October 21, 2008

Analysis of:LA Preview: 204-hp lithium battery-powered MINI E revealed! | www.autoblog.com

From the ecological point of view this is great news.What I wonder about is why this experiment is not being repeated in Europe,India and China? In India and China, urban air pollution in many cities is far worse than anything seen in California,and an imaginatively presented proposal would certainly receive substantial fiscal(tax)support in these countries given the growing acceptance of how adversely citizen health is being impacted.

Indian Aviation-an unsaturated market

October 20, 2008

Analysis of:Big market for small aircraft in India | timesofindia.indiatimes.com

As the country opens up,there is growing demand for airservices to many areas presently served only by roads and railroads.Coupled with this is the fact of a rapidly growing middle class(280 million plus) -notwithstanding the millions of poor(400million or so) well below the poverty line. In addition,the demographics,with 65%of the population below 30years of age,ensure that demand will remain high in the foreseeable future,despite the current downturn. With the formation of many new Special Economic Zones in the hitherto undeveloped areas of the country,new airports will come up,and these can only be served by small and medium sized aircraft. The article referred to merely highlights this aspect.

The changing dynamics of industrial investment.

September 29, 2008

Analysis of:Tata Scouting for New Sites for Nano After Protests | www.bloomberg.com

It is increasingly evident that acquisition of land for setting up factories can no longer be entrusted solely to Governments(i.e. politicians and the bureaucracy).Doing so, as the Tatas are finding out today,is an expensive simplification of a complex process. Given the low credibility for integrity of politicians,new land users adopting this route unwittingly set themselves up as targets for opposition politicians and end up,as the Tatas have done,getting caught in the political crossfire. 

Asia- an unexplored frontier for the Volt.

September 23, 2008

Analysis of:The Volt Isn't A Prius. It Might Even Be Better | blog.wired.com

The US and Europe are saturated markets, with very picky customers. In contrast, customers in developing markets have much clearer and simpler priorities - initial cost, running cost on very crowded city roads,and low maintainance.Range,acceleration,cornering, and speed are lower down on the scale,and could be easily sacrificed on cost considerations. The need to reduce urban vehicular pollution is another priority that can be successfully tapped to get tax incentives for such products. The recent Olympics have highlighted the extent of this problem in Beijing.Delhi and many of India's teeming cities are in a similar situation - particularly in winter.To succeed here,however, will require an extensive and smart public education program followed by lobbying decision makers in Asian Governments for sustained fiscal incentives.What is surprising is that the auto majors concerned are not really doing this in parallel with product development.

An excellent car builder now needs to connect better with his customers

September 15, 2008

Analysis of:Honda: China August Sales Up 19.4% | online.wsj.com

There is clarity in this analysis! Honda is good at designing and building excellent fuel efficient cars.Regretably,their after sales service provided by the company itself does not match up.

Power generation -can it support transportation needs as well?

August 21, 2008

Analysis of:Nissan sold on electric cars, not hybrids | money.cnn.com

As global consciousness about the need to reduce greenhouse gases grows, alternate power sources(wind, geothermal,wave,etc.)will necessarily take a larger share of the generation basket. These are likely to be more expensive than current coal and hydropower; so I wonder if projections of this have been factored into the economics of electric vehicles. In any case, the opportunity costs of electric power in India( and China as well,I expect)preclude a major shift to electric vehicles in the foreseeable future. Therefore, hybrids seem to be best for the next 20 years.

Dropping Testosterone from decision-making

August 19, 2008

Analysis of:A Strange Detour for Chrysler | www.businessweek.com

Though this may not be a 'macho'decision,I believe it makes eminent sense. Chrysler needs some new platforms, and it needs them now. How else do they manage this in a faling market with hybrids,& electrics snapping at their heels? In any case, if it manages itself well in making this shift, it should be able to buy itself the vital space it needs in the short term. Hypothetically,if it does this brilliantly, it could even take over Nissan ten years later!!!

A Corporate blind spot - markets for hybrids in the developing world.

March 12, 2008

Analysis of:Designing the Cars of the Future | www.businessweek.com

The major automakers are missing an opportunity by focussing on the car markets in the developed world for their hybrids. The real opportunity for breaking into high demand markets for such products actually lies in the developing world, so product development needs to be oriented accordingly.

Understanding the Tata ethic

March 12, 2008

Analysis of:India's Tata Stresses Long-Term Commitment | online.wsj.com

If you look at the Tata Motors history, it has grown under difficult conditions from a steam locomotive and truck manufacturer in the fifties to a designer and manufacturer of passenger cars, trucks and buses.Going upmarket into luxury cars is logically consistent; the question is affordability and focus at a time when the Group is making major international pushes into steel, IT, aviation,and hotels.

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