US Big Three Bailout and Conditionality

During last week or so, the media in US is agog with two hot news items- First one relates to the possibility of Senator Hillary Rodham Clinton, the wife of the former president and the rival of Obama in primary getting in the Obama’s government as Secretary of state, and the second is about the desirability of bailout for automakers. Naturally, the politics is not my great interest; the debate of the bailout for Big Three certainly does.

On my morning walk that is the normal office going time for Americans, I find cars speeding towards the destinations. For Americans, the proximity of the workplace is not the top priority for selecting their house of residence with one of the cheapest oil prices, good roads, and latest cars financed so easily with plastics. Surprisingly, I see the cars of Toyota and Honda far more in number followed by other Japanese, South Korean, and European cars. I hardly find cars of American Big Three. Why is it so? Is it because of quality or price?

With my experience of Hindustan Motors that had close connection with GM, I am of opinion that American Big Three had gone creating its presence in the entire potential markets world over. But they never tried to be at the top in those markets and yielded soon to competitors. As with other sectors such as machine tools and electronics America never tried hard to remain at the top. It is just by sheer worldwide presence that GM and Ford still remains near the top. In India, GM started with HM, and Ford with M&M, but soon decided to become fully-owned companies. Neither GM nor Ford was serious to become the leader in the market and so today Suzuki and Hyundai are the main car manufacturers followed by Tata Motors. Nano may push Tata Motors ahead of the other two, but with a bad beginning at Singur, many have started doubting it. Interestingly, VW is number one in China, and Fiat in Brazil. GM and Ford may have a better position in Russia. It appears the management of the American automakers doesn’t have the fire required to reach the top and remain there. Should it not be considered as a failure of the management that is taught in all world famed schools of Harvard, Stanford, Wharton, or Princeton that are the benchmarks for other developing countries including India?

General Motors, Ford and Chrysler have been making losses and going to run out of cash to continue soon. The course left is either bailout by the federal government or going for bankruptcy before year’s end. The Big Three have asked for bridge loans of $25 billion. The alternative route to file bankruptcy may mean catastrophic economic hardships in all 50 states with automakers having 239,000 U.S. employees, 775,000 retirees and spouses and 2 million people covered by company-sponsored health care. Collapse of Detroit Three could be cataclysmic and touch more than 4 million other jobs including suppliers, dealers, car haulers and rental companies. A shut down of Detroit will mean an around 10% of the national unemployment rate .

Both the Democrats and Republicans appreciate the problem and stake involved, and so are ready to assist, but it must impose certain tough conditions.

Automakers must restructure and become viable.It must improve up on its perception about its quality, and services among the customers. It must come out with some breakthrough innovations in hybrid, fuel efficiency, or alternative fuel technologies. The government would put limits on executive compensation including a provision barring bonuses from executives whose salaries are higher than $250,000 (couldn’t even retire with lucrative “golden-parachute” compensation) and a prohibition on the payment of dividends. Automakers would also have to submit plans on how they intend to remain competitive.

The Democrats’ plan in the Senate would give automakers access to $25 billion in loans from the $700 billion Wall Street bailout program for the financial companies.

The White House and many Republicans favor amending the law approved in September to extend automakers $25 billion in technology loans to retool factories and make more fuel efficient cars.

The whole of US is divided on only the way to help, and not on the need to help.

Some doubt if the bailout will fail to reform American auto makers. Jack Welch, the legendary former CEO of GE in Business Week suggests bankruptcy reorganization. According to critics like Jim Schrager at the University of Chicago, Booth School of Business, the wrong people are in charge. Bush, whose limousine is made by GM, opposes a bailout. President-elect Barack Obama is in favour of an aid package, but not a blank check.

I fail to understand why the American administration is so generous to the financial sector but not to auto? It came out with an unprecedented bailout of $700 billion for it. It set few restrictions. As reported, some large banks were even pressured by the administration to accept money they did not need or particularly want. Is it because of the heavy budget of the companies in sector for lobbyists that influence the administration?

I do also hardly understand why there is no mention of the correction required in UAW demands that has made labor and legacy costs for American automakers highly uncompetitive. Under new contracts, hourly pay and benefits for new hires were cut to about $26, while for the old employees it amounts to about $78. GM’s health-care costs tack on $1,500 per vehicle. Toyota and Honda spend a mere $400 per vehicle at their U.S. production plants. In Japan, it’s as low as $150 per vehicle.

Why the legislators are so afraid in talking about the union that is equally responsible for the poor shape of automakers today? Why are the old workers not agreeing to have cut on wages over going to bankruptcy? Why can’t the federal government subsidize the health care cost or get negotiated to the level of other sector? Interestingly, under a labor agreement last year, the companies are required to provide $15 billion to a health care fund for retirees in January 2010 and another $15 billion in 2012. And the UAW is separately asking for $ 25 billion bailout for it.

Naturally, US auto industry is badly in need of total platform change. The country must come out with some long term strategies in many areas of operations to make manufacturing relevant for it. Will it go for a similar bail out for Boeing tomorrow or for Cisco in tech sector, if situation arises?

GM is trying to educate the people about some wrong perceptions about the US automakers. I wish Americans find time to visit the site.

I wish the US automakers use its resources such as managerial talents in BRIC countries to improve upon the domestic car business.
PS
Latest on Big Three bailout, November 18,2008
CEOs Plead

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Nandan Nilekani’s ‘Imagining India’

For months, I was eagerly waiting for Nandan Nilekani‘s ‘Imagining India‘. Many a times, I find myself in dilemma of answering to me only, if I am a book lover or book collector. Yamuna, my wife, as usual, thinks I only collect books, I don’t read. I confess I am not a first-page-to-last- page reader of any book. But I read essentially the interesting chapters, particularly the first and the last ones. While the first one provides a fair idea of the contents with the mission and style of the book, the last chapter provides the conclusive remarks with future trends and the relevance of the contents dealt with in the book.

I told Anand about ‘Imagining India‘ who is equally sold about books. He didn’t find it on Amazon, but then when I showed another Indian site, he helped me in ordering the book from here (USA) itself. If everything goes as we hope, I shall have it in the mails, waiting for me on my return to India.

I have some more reasons to associate myself with Nandan Nilekani. Firstly, Nilekani is also an IITian, and secondly, I had also taken the adventure in writing a book even though I was in manufacturing sector and the people around me were hardly appreciative. I did succeed in getting my book on ‘Machining Trouble shooting’ (no more in print) published through Tata-McGraw-Hill.
I don’t have any intention to compare myself with Nandan. He has gone much higher than I could. Thomas Friedman in his book ‘The World is Flat’ gives credit for the title of the book to Nandan, who was one of the founders of Infosys. Will ‘Imagining India’ make Nandan a bigger celebrity? I wish so.

Many months ago, I had read an article of Nandan, ‘Six Things That Changed India’. That was perhaps the part of his book planned. Six things are as follows:

1.Gigantic human capital: The mindset of India about population has changed from looking at it as ‘burden’ to thinking of it as human capital. It will be India’s “demographic dividend” as in the next 20 to 30 years India would “have the largest pool of young people in the world, when the rest of the world is aging.”

However, I favour certain amount of control in population as a necessity to reduce pathetic poverty levels, though not through as harsh as China’s ‘one child policy’.

2. Entrepreneurship gains acceptance: Entrepreneurs are no longer viewed with suspicion but as icons of economic growth. Today, India has the largest pool of entrepreneurial talents outside the United States. Indian entrepreneurs are not afraid of liberalization anymore and globally competitive. They are investing abroad, and are buying companies abroad.

I wish all entrepreneurs follow the Infosys track record of creating wealthy employees too.

3. The power of English: English is no longer viewed as an imperial language. More and more people, whether they are in villages or small towns, are realizing that if they really want to participate in the global economy, and they really want to bring more income to their lives, they have to learn English. And, the political system has accepted this because more and more states — which had stopped teaching English — are now going back to teaching English from class one.

I differ with Nilekani on the issue a little. It is not necessary to teach English from class one. However, I agree that our children must learn English or any other foreign language that enhances employability as the second language.

4. Change in democracy: The notion of democracy had undergone a major transformation. Today, it has gone to become a bottom-up democracy where everybody understands their democratic rights — not just in the sense of parliamentary democracy or contesting elections. You see people taking charge and doing things in India without waiting for the state to do the job. Today, India is the most thriving place in the world for NGOs.

But can the synergies of NGOs be focused to one single purpose of universalizing education in India? Is it not the one big thing that can make real difference? Can technologies rescue when teachers sleep in class or give a slip?

5. The technology revolution: Technology had catapulted India and helped it leap-frog several decades. For example, India’s entire national election was held on electoral voting machines. Today, India has the most modern stock markets in the world and they are completely electronic. Mobile phone has become accessible to everybody. With more and more applications, it causes a quantum leap in productivity and much of this has fuelled the economic growth.

Why is India not having an explosive growth with manufacturing going to huts and hamlets?

6. Globalization embraced: India had adopted a progressive view of globalization. Our companies have become globally competitive and are willing to go out and global factors are really playing in India’s favour today.

I experience every day here in US how globalization has helped Indians. Today, one can find the parents from remote villages from all over India in every part of US visiting their siblings who work here. Could it be possible without globalization?

I can’t but agree with Nilekani that “there is a lot of work ahead in really reforming and improving the quality of education — both primary and secondary. Having just a few Indian Institutes of Technology or Indian Institutes of Management is no panacea. You need to have hundreds of them, like they have in China.”

And yes we can.

PS: Read a chapter-From Bangalore One To Country One

India, By Its People

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Stanford- A Bookstore Tells Global Ranking

Stanford is one place Anand loves to visit whenever, he gets opportunity. May be, he has a wish unfulfilled to be its students, or may it is because of his love for the bookstore in the university campus open to all that is the best that I have seen in my lifetime.

We had visited Stanford University campus twice or thrice during our visit to US in 2005 too. Aditya, the grandson of YP Singh, the only friend in Salt Lake was studying there. He did wonderfully well in CAT and got admission. However, we saw the university only from outside. Anand did not know much about the place. Anand came to know about the bookstore after Shannon came in his life. She has taken some course in the university.

It was a pleasure to go around the store after visiting the wonderful cathedral. I could then understand why this university is one of the best in the world. Why can’t India’s premier institutions such as IITs, and IIMs have bookstore of this standard that each of the great institutes such as Stanford, MIT, UC (Berkley), or Harvard are having in its campuses in US? Some private entrepreneurs such as Apeejay group that owns Oxford Book Store in Kolkata, will certainly be interested in setting up similar stores, if it is given certain incentives and space in the institutions’ premises in India.
Note: While a search for images on Google with ‘Bookstore Stanford University’ indicated 162,000 entries, the search for ‘Bookstore IIT Kharagpur’ had 3,930entries all mainly about IIT. You can yourself experience this.

I am sure that all the directors of the IITs and other institutes of excellence in India would have visited these American universities. However, I am not sure if they would have found time to go around the bookstores. Let me confirm that the bookstore will hardly require any drain on the institutes’ own resources. Will the HRD ministry create roadblock to prove its authority over the institutes if the directors invite some private entrepreneurs to do that?

Yamuna got a Stanford T-shirt from Shannon.

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Noida Hits me in Pleasanton

It’s 5AM here in Pleasanton. It must be evening in Noida. As usual, I am on my computer. The telephone rings. I don’t pick up assuming it as some marketing call. However, the message continues. My neighbor, Archana is on the other side.

Archana had gone to get my car lying outside the main door started today, as Ashok, her driver was going on leave. She found through the wire mesh on the steel gate on the main door that the doors inside are open. After sometime she informed me about a possible burglary. Burglars had opened the doors and steel almirahs of all the rooms. Materials were lying outside. What could I do? I asked her to get all the doors locked, if possible. There is no use in reporting to police. This is the third instance of thefts at my residence in Noida. Perhaps, to burglars, we are pretty rich.

They would have certainly got something useful or them. Everything can’t be put in locker. We didn’t leave anything inviting burglary. They would have considered my age and spared me. I got again a shock of life. However, how is it possible? In the huge lot of unemployed youths from all over the country in Noida, the risk would have been worth taking for some.

I don’t know if someone can help me out. It didn’t happen in earlier two cases. As usual, Yamuna keeps me blaming and I do the same. We had been going quite frequently in last five years. But nothing happened. We got complacent. Three thefts in 6years against two in six months that happened in 2003 are better statistics of law and order!

Anand suggests us to keep all the doors open. Rakesh also said the same when he came along with Alpana hearing the news. At least, it will eliminate the cost and trouble of the repair required after a burglary. This is the same India, where as per the Chinese travelers, the law and order was so good that the people never used locks.

Here in Pleasanton, Anands hardly lock anything. Sometimes, I become a little emotional, may be a little impractical too. Next time when we shall go out, we shall put a sticker saying, ‘Here are the keys. If you wish to burglar, please use them and don’t break the locks or door. Difficulties in getting the repair done in Noida are more worrisome.’ Or ‘We have kept the keys in a place near the main gate. Use your commonsense and search it. Please don’t take risk and break locks.’

But can we keep on living in Noida? Can we expect Noida to become Pleasanton?

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A Visit to a US Elementary School

 

It was Sunday, October 19. Alpana and Rakesh had invited us to join them in a carnival with their kids. Montair Elementary School, the public school of Keshav and Anvita in San Ramon had organized it for fund raising as mission. Rakesh said, ‘a middle class Americans can’t afford private school in US’. For those in India whose children are in US keep on boasting about their salaries in US converted in Indian currency. But that fat salaries can’t buy a good school for their own children. Is it not surprising? As I understand, almost all young parents in Noida must be sending their children in private schools. Every sector of Noida is having a good private school. It is unlikely that anyone except from the very menial workers such as maids and cart pullers send one’s child in government schools.

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The elementary school in US covers KG to class V. Rakesh and Alpana took us through the carnival, that didn’t have anything unusual. However, the book fair was a unique idea. There was a section where a parent could buy the books for the class teachers of their kids. Moreover, the fair makes it easy for the children to get exposed, attracted and interested in books. The school was closed. But I could see some part of school. The creativity center, science centre, and the beds for plantation made me feel happy and excited. Even in this totally urban population, the school tries to make the kids plant some flowers or teach its need. The science centre imparts basic science knowledge through models and easy to carry out experiments. The creativity centre provides the means to find out the special interest in the pupils. I wish India could emulate the concept of creativity centers in every school. I don’t think it means a lot of investment. The education must provide facilities to identify and further the latent creativity in every student. I could find the website of the school that provides interesting information.

All the while I was thinking about the public schools in India. Yamuna was associated with one in our own sector that is maintained by Noida Authority. I can’t draw any comparison. Media of both the countries express concerns about the poor rather miserably poor condition of government schools. In US, parents keep a watch of the locality with better public schools based on ratings that are easily available through Internet and shift. Perhaps, in India too, a system of rating system of all the schools by an independent authority must start to help the parents.

Rakesh feels the American system is pretty good. In a chapter on American Power in ‘The Post-American World’, Fareed Zakaria writes, ‘it (American education system) is much better at developing the critical faculties of mind, which is what you need to succeed in life. Other educational systems teach you to take tests; the American system teaches you to think. It is surely this quality that goes some way in explaining why America produces so many entrepreneurs, inventors, and risk takers. It’s America, not Japan that produces dozens of Nobel Prize winners.” US certainly gives a lot of importance to education.US is going to invest $18 billion to overhaul of the nation’s public education system over the next few years. It was clear during the campaign and even now. We are happy. We can dream a better future of our grand children, who are all American citizens by birth.

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IIMs-Are They The Best?

RC Bharagava has recently made certain very relevant remarks about what and how IIMs are manufacturing management graduates. IIMs attract the best brains of India that include engineers, doctors, accountants, arts, science, and commerce graduates and even some from those selected in administrative services. Even hordes of IITians after getting the specialized training and knowledge of engineering join IIMs. Unfortunately, most of the students are without any work experiences. I am one of the many who disapprove this.

I have written many times about it. I earnestly appeal the industrial bodies such as CII, FICII and others to discourage this practice. It results in the diversion of the best lot to grow as generalists rather than as expert professionals such as engineers, architects and doctors.

RCBhargava was the CEO of Maruti Ltd. And as it seems, he is still the chairman of Maruti Suzuki, though it has become a Japanese company after it bought the majority of the share from the Indian government. He has a very strong and genuine concern and suggests that the IIMs must create and use Indian case studies instead of taking them from foreign universities such as Harvard. Interestingly, Mr. Bharagava heads a recent IIM Review Committee set up by the Centre. His viewpoints are pertinent: “India is a big enough country. So why are we not creating material out of the Indian experience? If there are no sufficient Indian case studies, how do you teach and create managers who are relevant to our business context?”

According to him, not a single “really good” case study of even Maruti had emanated from the IIMs. “Somebody has done a little bit here and somebody a little bit there. That’s all.” It is strange, as we keep on hearing Harvard using Indian Railways, Mumbai Dabbawallas, FabIndia, and ITC’s e-Choupal for its case studies. Are the teachers in the management schools negligent or complacent? Remunerations, some say, are poor. But can that be the reason when one selects teaching as profession?

According to Mr.. Bharagava, Management teachers are having so strong an obsession for teaching western business models in B-schools that nobody even mentions, let alone teaches a course, about Japanese management practices. “Students aren’t really told how the Japanese built up their industry after the war and the management systems developed by their firms.” Who can deny the mastery of Japanese of manufacturing management? It is the Japanese who produce better than six-sigma quality standard without following that practice. Surprisingly, the whole of West and US has started learning and following Japanese management system. Indian industry has got the maximum benefit out of it with many Deming Prizes with it. Only when the West adopts the Japanese management systems, some of it comes back to the teachers of IIMs. Tata Motors and Ratan Tata’s Nano can get globally accepted, but IIMs will not consider that a subject of case study to teach innovation in it courses.

The IIMs are not being able to attract good faculty, particularly in functional areas such as finance, marketing, organizational behaviour and strategy. Though research and creating knowledge was one of the missions of IIMs apart from running post-graduate management programmes, it hardly does any significant research. Media hardly covers IIMs but for the admission and placement details with spicy reports. People at large in India might have heard of CK Prahalad, Tarun Khanna and so many other management gurus of Indian origin who are reputed management thinkers in US. But hardly any of the professors of IIMs have published any books that are as popular as those by them.

IIMs produce very few PhDs and very few students find it attractive to come back as faculty. To Mr. Bharagava, Brand IIM has probably more to do with the quality of the students who enter through a ruthless process of selection rather than because of the contribution of teachers.

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Chhath in US: An Unique Experience

It was Sunday morning. When I started browsing Times of India in the early morning, I found Chhath already started in Patna. It was due to the time difference. We decided to follow the local time instead of that of India. Yamuna had wished a Chhath in US where all my sons are based today. It is difficult for all to participate, but Alpana, the eldest daughter-in-law does it. I consulted her to carry out the task here in US. For ‘nahai khai’, she got me the vegetable of louki and channa dal lintel prepared at her place with all the precautions on Sunday.

I went for fast for Monday’s kharana with fruits and milk in evening. On Tuesday Nov 4, I along with Anand offered my first ‘arghya’ with fruits only to the setting Sun God by 5PM as directed by Alpana. Yamuna created a water body in a plastic tub. Though this long fasting becomes torturous, but I could carry on well. And the second and final ‘arghya’ to the rising Sun God is at 6.30AM on Nov 5. Naturally this happens after almost 12 hours or more when all in India would have enjoyed the rich meal after the fast.


I remember of homologation of a foreign designed car, so it happened with Chhath too. I am sure the Sun God will forgive me for all the shortcomings that were not intentional. A religion as well as society can remain dynamic with only necessary changes. However, I can never forget the scenes of ghats of Hoghly in Uttarpara near Hind Motor, its crowd of simple men and women, young and old, children of all ages, flowing river with famous Dakhineswar temple facing us while offering of arghya, and the sweet folk songs in praise of Sun God. I missed all that here, but I did perform my fast religiously and that is important for me.

While answering to Anand, I expressed my views about Chhath as festival: Chhath must have origin in prehistoric period, when human beings worshipped Gods that represented the natural powers like rivers, trees, wind, fire, and planets. Later on the thinkers would have found Sun as the origin of this earth. As all the living beings evolved out of this earth with all the natural powers around, the Sun became the earliest and highest, and so most respectful for mankind. The rural people kept this oldest thinking alive. Chhath is only the manifestation of a strong faith. Fast is for physical purification and testing oneself for physical capability to keep away from the worldly attraction in which good food has become primary thing today.

I may be wrong and I am ready to get corrected. But there is no malice in my views.

Let Sun God bestow on this nation and mine, my all known near ones, and my siblings all the peace and prosperity against the penance of mine.

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Nov 4, 2008 Americans Create History

Nov 4, Pleasanton, USA: Around 12.30 PM, I went to see Shannon, the lone voter in family, voting along with Anand and Krish. The polling station was a public middle school, which Emma and Krish would attend if Anand and Shannon live in Pleasanton. Though media had been reporting long queue in front of the polling station in different part of USA, this polling station had hardly few voters. Surprisingly, there was no police at all. Anand couldn’t enter the station as he had put on an Obama-printed T-Shirt. Shannon could manage with my jacket. The election officer had suggested reversing the T-shirt. Shannon was a little agitated as a citizen of a country that provides all freedom.



Inside everything went on without any fuss. The station was tidy and manned by some five persons. Shannon got her ballot paper that was pretty lengthy, as the voter is to not only select the president/ vice president combination, but also the senator from the state, mayor and other members of the county such as education board. He is to express his choices on various resolutions of the state and county as well. The station had booths to mark the choices, a touch screen type electronic voting machine, and a scanner for paper ballot. Interestingly, while Indians all over the country use electronics voting, I hardly saw any one using the most advanced equipment. Most used the paper ballot and handed over to the election officer. The election officer put it into the scanner and gave back the receipt of voting, a portion torn off from the ballot paper. Surprisingly, there was no restriction on photographing. I could take many photographs.

And by 8.30 PM, it became clear that Americans had created history by electing Obama with overwhelming majority. That was the most delightful moment of this great democracy. There can never be any better example of integrity and solidarity of people in majority of the nation.

However, I liked the speeches of the winner and the vanquished as the best that were the mature expression of politics of the greatest democracy of the world. It got me overwhelmed. One gets that experience only rarely in lifetime. I wish India and Indians, particularly politicians, could learn this magnanimity and nation building as purpose and priority of politics from USA by going through these speeches. Unfortunately, the quality of debates and speeches hardly gets encouraged in Indian political system.

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Belated Happy Halloween

It was one of the great Fridays. I did my pumpkin carving all by myself. It was my first attempt to do some creative through crude artwork after my entrance examination for IIT, Kharagpur in 1957in which I had attempted to draw a crow like bird freehand perhaps ten times of the given size. Both attempts came out well.

But still I couldn’t appreciate my work on pumpkin till I saw a candle lighted inside making it interesting though without creating any horror. It became a real happy evening when I saw the hordes of kids of all ages in wonderful Halloween specific dresses coming for collecting their share of candies. It was Shannon who clarified the ‘Halloween Trick and Treat‘ and helped me to appreciate its significance better. But then I found 3,950,000 entries in Google.

For Halloween, I saw the number of entries at 189,000,000. Halloween seems to carry varying religious and social significances. Yamuna was happy that even in US people talk of witches. Perhaps every society has conceived of the witches to create fear in its earliest ages. I get reminded of my childhood when my grandmother will tell me to be at distance from some lady as she was a witch (dayan). My grandmother used to tell many stories of the witches. Even today witch-hunt goes on in villages and less affluent society, many times resulting in horrible end. Interestingly, Anvita, the eldest of the granddaughters of the family came to meet us dressed up as a vampire. Yamuna could appreciate it more when I explained that vampire is a blood-sucking witch.

Shannon as great host kept on offering the candies. With the number of children visiting us, it appeared that the community around appeared to be very participative. Richrd Florida in his new book, ‘Who’s Your City?‘ has mentioned about the number of Halloween visitors as index of livability of the community. Yamuna and myself enjoyed the dresses and makeup along with their brimming enthusiasm.


Around 60 kids would have visited us. All these kids must be collecting quite a lot of the candies, may be good enough for few weeks. When I asked my grandson Keshav and Anvita, I found their score as 135 and 100 respectively. As I mentioned in an earlier entry, the market of Halloween related consumer goods and commodities must be in billion in US, and China gets the maximum out of this consumerism.

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Can Indian Cars Enter US Market?

Fareed Zakaria in an article in Newsweek talked of some bad habits that US has developed over the past few decades, and they must kick those habits. I feel one of those habits is for keep on purchasing many things and keeping the racks full, be it food items or household accessories. However, the vehicles are the costliest item in every household. It creates the major hole in monthly expense budget. For that matter with the habit of credit cards use entrenched deep, I doubt if the couples ever seriously think of balancing the earning and expense. Money is easy, and innovative financial products are tempting. Anyone can borrow any amount of money for any purpose. Even with all the data of credit records online, the banks hardly makes any endeavour to use it at least for spendthrifts. And so even a bankrupt gets money and credit.

As I observed this time, most of the Americans have at least two cars, and at least one is big powerful utility category that burns more gas. And if one carefully observes, it is the bigger car that goes in use even for nearby pancake or grocery shop. Walking up to such destinations for such purchases that could have certainly improved physique is beyond imagination.
However, I am only talking about household cars. Americans can easily replace the car in addition to the huge one with them by a small vehicle, may be mini or fuel efficient compact. Americans don’t do that, neither lobby dominated government policy encourages for that.

As reported, “During the oil crisis of the 1970s, mini-compacts, such as the Mini Cooper – then the smallest auto available in the U.S. – achieved their highest market share in 1978, when gasoline prices were high. But mini-compacts never really caught on, and their market share declined even as gas prices rose further. The slightly larger subcompacts, such as the Volkswagen Beetle, grew market share only when prices were rising, and lost share from 1982 onward…Compact cars, however, like the Ford Escort and Honda Civic, have become widely popular over the years. And the compact class has held the single greatest market share of any segment for nearly every year since 1980.”

With American crave for power and speed, automakers and the country’s R&D experts will have to work hard to get the desired emission standard with the fuel consumption of 100miles a gallon.
Hybrid compact car such as Toyota’s Prius is another success story in US. However, US have not given Prius any concession to make up the high initial price. It’s Toyota’s unique system that has made it so popular with all commercial disadvantages. And perhaps that is the reason that other big automakers have not come out with any competitive product with success. GM is trying to come out of its mess with Volt, the plug-in electric vehicle. ‘GM executives need the Volt to become an iconic product, like Apple’s 1998 iMac’.

Unfortunately, the two Indian automakers- Tata Motors and M&M don’t have any compact car good enough to compete with the present products available in US market from Europe, Japan, and Korea. With US still retaining its top position as a market, any auto making country and its manufacturers will always wish to enter in US. Time and again, I see the news of the attempts by Indian manufacturers to enter the American market. Mahindra & Mahindra (M&M) may think of launching its new multi-utility vehicle Xylo, that has been its most ambitious project after Scorpio in US market. The Xylo, as claimed, will ‘give the ruggedness of the SUV, space of a MPV and luxury of a sedan.’ Tata Motors’ Nano though is ambitious to get into US, but Tatas are to work hard to make it acceptable to the American buyers because of their habits. Tata Motors instead can improve upon Land Rovers from its newly acquired UK plant.

Indian automakers will have to come out with some global class products that get attractive enough because of its overall cost to American consumers. For that it must get into some breakthrough innovations. The effort is on with building up of the engineering and research strength by both the companies on almost war footing through collaborations as well as acquisitions. With easy money on credit, Americans perhaps may perhaps not bother about the price for a long time to come unless the habits get changed.

Conclusion: Let Indian manufacturers work on world best compact cars and SUVs with latest technologies such as Hydrogen, battery, or any other breakthrough innovations, it they wish to enter US auto market. Chinese carmakers are already working overtime to get into this lucrative market. Will Indians put the right energy at the right place to win?

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