Automobile Sector: Still A Potential Savior

So now Nanos are out on road. However, I have not seen one in Noida still. Perhaps either Noida or I myself is unlucky. I wish every individual user of Nano write about their experiences. It will be a great service to the country. The feedback will make the manufacturer prepare it for the global launch.

As reported, Tata Motors has a plan to launch it in South American countries and its tie-up with Fiat will come to its assistance. Tata Motors may be getting it ready also from American market that has a potential for it in each home as second or third car. With the changing thrust for global warming and recession, the potential is huge and real.

A recent study on the “Opportunity for Chinese and Indian Brands in the USA” survey by AutoPacific shows that 15 percent of the new buyers would look at buying a car from China, while 11 percent would go for a car from India.”Understanding these consumers will be critically important to the success of any manufacturer with ambition in American market.” It will be interesting to see who gets in there, the Chinese or the Indian. Tata Motors is the only possible candidate from India. However, Tata Motors will have to have a foothold in US, as the transportation of completely built cars from India may not be commercially viable.

I wonder if the company is working on a real huge global presence. At till date, Tata Motors has not come out with any aggressive plan of producing Nanos. If the feedbacks are good about its robustness, it can sell a million cars in India. With financing faculties, very soon almost everyone in middle class can afford it even at a little higher price.

A recent report in ‘Strategy+Business’- ‘The Best Years of the Auto Industry Are Still to Come’– may motivate Indian auto manufacturers to push ahead with innovative products such as Nanos to huge population waiting to own a right car? Booz & Company estimates suggest that more than 370 million additional vehicles could be sold by 2013 and more than 715 million by 2018..

Earlier I had thought Tata Motors to have invented some unique way of assembling it at all the main dealers. Even today, some have this perception. One news report in ‘Business Standard’ says, “To reduce shipping costs, Tata does not fully assemble the Nano in factories; instead, the cars are shipped in parts and assembled in regional centers.”

Nanos must prove its wonderful receptions in all Auto Expos over the world with its performance. Nothing better can be written about Nanos what in March 2009, Business Week did while covering the launch with “What Can Tata’s Nano Teach Detroit?

It makes me refer to the ambitions of Geely, China’s biggest privately owned car firm. As reported in The Economist, Geely’s technical director, ‘Frank Zhao claims that Geely will have the capacity to make 2m cars a year by 2015’.

Tata Motors has delivered 2,475 units of its small car Nano within 15 days of its commercial roll-out. Tata Motors has promised to deliver up to 60,000 Nanos by July next year, and the first one lakh cars by 2010. It means Tata Motors has capacity to produce about 5,000 every month. I wonder why Tata motors with all its facilities and that of its vendors can’t increase its monthly production gradually before it starts its Sanand Plant in Gujarat with an initial annual capacity of 2.5 lakh. It appears Tata Motors wishes to test the market before going whole hog. Many times it seems Tata Motors wishes to be excused for the delay on Mamta’s Singur episode where according to Tata Motors 95% construction had been completed. But I have hardly come across some plans from CEO of Tata Motors such as one of Geely’s. Has Tata Motors any plan to expand the capacity beyond 2.5 lakh per annum at Sanand or will it be content with selling in lakhs instead of in million?

It will be another missing the manufacturing bus by an automobile company to give unsurpassable handicap to China. Unfortunately, the Indian auto manufacturers are not having the strategy to push automobile manufacturing in big and innovative way. Instead all the manufacturers are trying to grow on the strength of China by importing their parts and subassemblies with the excuse of cost instead of supporting the Indian auto component manufacturers that one time considered superior to Chinese because of better quality and design capability with some even grabbing Deming Prizes.

Automobile still remains the indicator of a country’s development and economy. Manufacturers such as Mahindra and Mahindra, Ashok Leyland, Bajaj Auto, and Maruti Udyog, though now a Japanese company can make India a significant player in automobile in the world.

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