Hi Friends...
I've created a New Domain. And hereafter i'll post only in www.rvivekshanmugam.com
I'd like you to update my web address and check out my new site...
Thank You! :)
Friday, September 12, 2008
Wednesday, February 27, 2008
Subconscious Mind...
Subconscious Mind...
If you have ever read any self help information or information about the mind, then you have probably come across the term "subconscious mind". This statement is thrown about so often, that people are familiar with the term "subconscious" but have little or no idea what it actually means. In this article we are going to be taking a brief look at what is an extremely complex and detailed subject.
So What Is The Subconscious Mind?
The simplest way to understand the subconscious is as a sleeping mind, that you have no conscious awareness of. Your subconscious is constantly recording new information you obtain from the environment around you and stores it away. This means that everything you have ever seen, heard or experienced has been filed away somewhere in the depths of your subconscious mind.
The information that has been stored in your subconscious forms your belief systems, which influence how you act as a person and the things you believe in.
However not all information that enters the subconscious is equal. For example, your first 6 years of life will have the greatest influence on shaping your subconscious mind. This is because when you are born you must learn how to do things, and the way the world works from other people. Therefore the first people to have an influence on your mind are y
our parents.
After 6 years of age your subconscious now has a foundation of information to work with, and so in the future, compares all incoming information against what it already has. This means some information may be rejected, modified or added too. This tweaking process typically occurs during your teenage years, after which it becomes much more rigid, making it harder to alter.
However it is possible to modify your beliefs in the subconscious after your teenage years, however it will likely take repeated exposure over a prolonged period of time in order for the subconscious to be modified again.
So as you can see your subconscious mind is who you are, who you have been and who you will be in the future. It is influence by some information more than others, which makes up belief systems that are expressed in the way you live and act in your life.
The Power of Your Subconscious Mind
"The reason man may become the master of his own destiny is because he has the power to influence his own subconscious mind." – Napoleon Hill
The power of your subconscious mind cannot be under estimated. Even though we do not fully understand how the subconscious works exactly, the power of it is undisputed.
It is important to understand that both negative and positive thoughts have an effect on your subconscious mind. By continually dwelling on what's wrong in our life, our subconscious is fed with negatives, and we become gloomy. Just by being aware of what we think, read, and listen to, we can make a positive change.
If you
leave it, your subconscious mind will be like a garden that is unattended - the weeds will take over. You DO have control over this awesome power. And the really cool thing is that there is no rocket science needed to develop it.
A practical method for feeding your subconscious mind with positive material is reading. Find an article, or book chapter about something that really strikes a chord with you - somthing that's really positive. Keep this this handy (bedsied drawer or on your desk), and read it regularly. You will be amazed at how easily you recall this material after only a short time. That is the power of your subconscious mind.
Thursday, January 10, 2008
The Making of the Nano...!
The making of the Nano
Chairman's Profile
Ratan Tata rolls the window down and talks about the vision and conviction, the innovation and improvisation, and the leap of faith that went into creating the People's Car
The launch of the People's Car by Tata Motors is a defining moment in the history of India's automotive industry. For Tata Motors, the car — christened the Nano, because it is a small car with high technology — is the next big step in a journey that began with the Indica. For the Tata Group, it is the realisation of a pioneering vision to create a breakthrough product globally that rewrites the rules of the small-car business.
What does this path-breaking endeavour really mean for the Chairman of the Tata Group, in many ways the inspiration behind the car? That's what Christabelle Noronha set out to discover when she met Mr Tata at Pune, as 2007, a momentous year for the Group, was drawing to a close.
The Tatas and you, in particular, are on the brink of realising a long-cherished ambition. Do you feel vindicated? Are you apprehensive?
There has always been some sort of unconscious urge to do something for the people of India and transport has been an area of interest. As urbanisation gathers pace, personal transport has become a big issue, especially since mass transport is often not available or is of poor quality. Two-wheelers - with the father driving, the elder child standing in front and the wife behind holding a baby - is very much the norm in this country. In that form two-wheelers are a relatively unsafe mode of transporting a family. The two-wheeler image is what got me thinking that we needed to create a safer form of transport. My first doodle was to rebuild cars around the scooter, so that those using them could be safer if it fell. Could there be a four-wheel vehicle made of scooter parts? I got in touch with an industry association and suggested that we join forces and produce what, at that point, I called an Asian car: large volumes, many nations involved, maybe with different countries producing different sets of parts… Nobody took the idea seriously, nobody responded.
This was similar to what happened when we wanted to get going on the Indica. I had proposed a partnership with an industry body to create an Indian car, designed, developed and produced in India, something that could be conceptualised and executed as an Indian enterprise. Everybody scoffed at the concept. I remember people saying, "Why doesn't Mr Tata produce a car that works before he talks about an Indian car." My confidence got a boost when we finally succeeded with the Indica. Willy-nilly, we decided to look at [the low-cost car] project within Tata Motors.
It was never meant to be a Rs1-lakh car; that happened by circumstance. I was interviewed by the [British newspaper] Financial Times at the Geneva Motor Show and I talked about this future product as a low-cost car. I was asked how much it would cost and I said about Rs1 lakh. The next day the Financial Times had a headline to the effect that the Tatas are to produce a Rs100,000 car. My immediate reaction was to issue a rebuttal, to clarify that that was not exactly what I had said. Then I thought, I did say it would be around that figure, so why don't we just take that as a target. When I came back our people were aghast, but we had our goal.
Today, on the eve of the unveiling of the car, we are close to the target in terms of costs. We are not there as yet, but by the time we go into production we will be. This project has proven to everyone that if you really set yourself to doing something, you actually can do it.
Two-three important events have influenced the development of the car; inflation, for one. The cost statement was made three-four years back but we are holding on to that price barrier. This will definitely diminish our margins. The price of steel, in particular, has gone up during the intervening period.
A second point is that we initially conceived this as a low-end 'rural car,' probably without doors or windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw, in a manner of speaking. But as the development cycle progressed we realised that we could - and needed to - do a whole lot better. And so we slowly gravitated towards a car like everyone expects a car to be. The challenge increased exponentially; there was the low-price barrier, inflation, adding more features and parts to the vehicle, substantial changes in basic raw materials… What the team has been able to achieve, in the face of all these constraints, is truly outstanding.
What does it mean to me? It means that we have in us the capability to undertake a challenge that many car companies have chosen not to address or have been unable to address.
What are the innovations that have made the Tata Nano possible, from design to product finalisation?
Initially I had conceived a car made by engineering plastics and new materials, and using new technology like aerospace adhesives instead of welding. However, plastics didn't lend themselves to the volumes we wanted because of the curing time required. Volumes mean the world in this context: if we produce this car and if it is for the wider base of the pyramid, we can't settle for small numbers because then the purpose is defeated.
When we were planning facilities for the car and working out a business plan, the business plan shown to me was looking at a figure of 200,000. I said 200,000 cars is crazy. If we can do this we should be looking at a million cars a year, and if we can't do a million then we shouldn't be doing this kind of car at all.
But such a figure (a million cars) has never been achieved in the country before. If it had to be done the conventional way, it would have meant investing many billions of dollars. So we looked at a new kind of distributed manufacturing, creating a low-cost, low break-even point manufacturing unit that we design and give to entrepreneurs who might like to establish a manufacturing facility. We looked at different ways of servicing the product, at the customer's location, and through a concept adopted from the insurance industry, wherein self-employed people are trained and certified by us. And we went back to innovation in design and scrupulously took, as much as we could, cost out of the product.
We did things like make similar handles and mechanisms for the left- and right-side doors; we developed our own small engine which could sit under the rear seat, enabling us to craft a smaller overall package; we looked at a new type of seats; and we worked at cutting costs everywhere. We have put our instrument cluster in the middle, not in front of the driver. This means the same dashboard will work for a left-hand-drive vehicle. There are a lot of such innovations that are low-cost and future-oriented.
Equally important to the cost structure was the incentive we could get from having our manufacturing facility at a particular place. The benefits on this count will be passed on to the customer.
Our move to West Bengal was a leap of faith and a sign of our confidence in the leadership in the state. We were breaking new ground, not only on the product front but also in helping industrialise a previously ignored part of India. But we did not start out getting the incentives that other states were offering. I remember telling the chief minister [Buddhadeb Bhattacharjee], "Sir, much as we have tried, it makes no sense for us to come to West Bengal. We cannot meet the cost requirements we have without incentives." It was then that we negotiated a set of incentives that, long-term, work out to be the same as we may have had if we set up in some other place.
Other than emission norms and safety standards, what are some of the other challenges, physical and psychological, that Tata Motors had to overcome to make this car happen?
There was the usual dilemma of what is basic and what is nice to have. A basic car may not have all the niceties its fancier cousins sport, and when you're looking at saving money on every single bit of the car — even parts that cost as little as Rs20 — you keep facing these dilemmas. Hundreds of such dilemmas have risen.
However, we were always conscious that there should be no quality stigma attached to the buying of this product. One thing we were clear about: this was never going to be a half-car. Nobody wants a car that is less than everybody else's car. Our car may have a small engine and certain limitations in terms of being basic, but that does not make it inferior. Also, we have a higher version of the car - with air conditioning, leather seats, etc - that we will be displaying at the auto show in Delhi. We hope people will look at that, too. Down the line, as we widen our range, we will have dressed-up versions with higher-powered engines, diesel engines, automatics and the like. We have a whole bunch of innovations coming along on this platform.
What we now have is a car that is truly low-cost which has, approximately, the same performance as a Maruti 800 in terms of acceleration, top speed, etc.
When future versions of this car hit the market, will they not be in direct competition to the Indica?
No. The way I see it, this vehicle will cannibalise some of the lower-end car market and some of the higher-end motorcycle and scooter market. It will eat into both of those markets but it will also create a market of its own. It will expand the market by creating a niche that did not previously exist. It may well cannibalise some of the higher-end car market, but to a small extent, and probably only when people look to buy a second or third car.
About the criticism that the car will add to India's pollution problems, why are the Tatas being singled out?
This is something I'm going to talk about at the launch. For now, let me just say our car will cause less pollution than a two-wheeler.
I'm trying to think of a parallel where someone has introduced a product at a disruptively low price and changed the market. A good example would be the Swatch watch, low-cost, trendy and with a wide range. Did Swatch finish off the Swiss watch industry? No (in fact, it was a Swiss company that created Swatch, the same company that produced Omega). Did it finish off Citizen and Seiko and other Japanese competitors? No. Did Swatch cause the Japanese and others to produce something like the Swatch? Yes, it did, but Swatch continued to dominate its niche.
What did this do to the global watch industry? It enabled somebody to look at a wrist watch almost like cufflinks: you could buy 10 Swatch watches, you could wear different ones for different occasions. Swatch sold multiple watches for a single wrist. I think something similar could also happen with the Nano.
Why are people attacking only the Tata Group?
I think it comes from vested interests. Let's ask ourselves why the car is attracting so much attention and why it is being attacked so much. My view is that if the car were not attracting all this attention, it wouldn't be attacked. This car has provoked serious apprehensions in some manufacturers. There are people in our company even who fear what it will do to the Indica. Do you think there's a concern among three-wheel manufacturers that it might replace their vehicles? Yes, there is because some three-wheelers cost more than what the Nano will cost. All in all, I think people are attacking us because they are apprehensive.
Has the Indica experience helped in the creation of the Nano?
Oh yes, enormously. The Indica experience and the Ace experience have helped; Ace especially because it was another tight, cost-based exercise.
From the Rs1-lakh car to products costing many millions, if the Jaguar deal comes through: What next for the Tatas on the automotive front?
I won't comment on the Jaguar deal, but to answer your question, we are not in an acquisitive mode. That's not our strategy for growth.
The Tatas have been on the front pages constantly of late— what is it like being in the middle of it all?
Embarrassing and unpleasant. Whenever you are on the front page, you are also — each time, and more so in India than elsewhere in the world — creating detractors and critics. For every action there is some kind of reaction, somebody who is hunting for something to criticise. And most often it is the reaction that people remember. This is all the more embarrassing because we are not a Group that seeks publicity.
If you look at the coverage that has happened, you cannot fail to notice how the low-cost car has been turned into an issue of congestion, of pollution, of safety. Initially it was all about why a car at this cost was simply not possible; that talk is long gone, only to be replaced by these 'new' concerns. We are not really talking about how it will change the way people live or transport themselves, what their aspirations may be.
Ideally, I would really wish we didn't have the visibility and the media publicity because we haven't sought it.
Chairman's Profile
Ratan Tata rolls the window down and talks about the vision and conviction, the innovation and improvisation, and the leap of faith that went into creating the People's Car
The launch of the People's Car by Tata Motors is a defining moment in the history of India's automotive industry. For Tata Motors, the car — christened the Nano, because it is a small car with high technology — is the next big step in a journey that began with the Indica. For the Tata Group, it is the realisation of a pioneering vision to create a breakthrough product globally that rewrites the rules of the small-car business.
What does this path-breaking endeavour really mean for the Chairman of the Tata Group, in many ways the inspiration behind the car? That's what Christabelle Noronha set out to discover when she met Mr Tata at Pune, as 2007, a momentous year for the Group, was drawing to a close.
The Tatas and you, in particular, are on the brink of realising a long-cherished ambition. Do you feel vindicated? Are you apprehensive?
There has always been some sort of unconscious urge to do something for the people of India and transport has been an area of interest. As urbanisation gathers pace, personal transport has become a big issue, especially since mass transport is often not available or is of poor quality. Two-wheelers - with the father driving, the elder child standing in front and the wife behind holding a baby - is very much the norm in this country. In that form two-wheelers are a relatively unsafe mode of transporting a family. The two-wheeler image is what got me thinking that we needed to create a safer form of transport. My first doodle was to rebuild cars around the scooter, so that those using them could be safer if it fell. Could there be a four-wheel vehicle made of scooter parts? I got in touch with an industry association and suggested that we join forces and produce what, at that point, I called an Asian car: large volumes, many nations involved, maybe with different countries producing different sets of parts… Nobody took the idea seriously, nobody responded.
This was similar to what happened when we wanted to get going on the Indica. I had proposed a partnership with an industry body to create an Indian car, designed, developed and produced in India, something that could be conceptualised and executed as an Indian enterprise. Everybody scoffed at the concept. I remember people saying, "Why doesn't Mr Tata produce a car that works before he talks about an Indian car." My confidence got a boost when we finally succeeded with the Indica. Willy-nilly, we decided to look at [the low-cost car] project within Tata Motors.
It was never meant to be a Rs1-lakh car; that happened by circumstance. I was interviewed by the [British newspaper] Financial Times at the Geneva Motor Show and I talked about this future product as a low-cost car. I was asked how much it would cost and I said about Rs1 lakh. The next day the Financial Times had a headline to the effect that the Tatas are to produce a Rs100,000 car. My immediate reaction was to issue a rebuttal, to clarify that that was not exactly what I had said. Then I thought, I did say it would be around that figure, so why don't we just take that as a target. When I came back our people were aghast, but we had our goal.
Today, on the eve of the unveiling of the car, we are close to the target in terms of costs. We are not there as yet, but by the time we go into production we will be. This project has proven to everyone that if you really set yourself to doing something, you actually can do it.
Two-three important events have influenced the development of the car; inflation, for one. The cost statement was made three-four years back but we are holding on to that price barrier. This will definitely diminish our margins. The price of steel, in particular, has gone up during the intervening period.
A second point is that we initially conceived this as a low-end 'rural car,' probably without doors or windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw, in a manner of speaking. But as the development cycle progressed we realised that we could - and needed to - do a whole lot better. And so we slowly gravitated towards a car like everyone expects a car to be. The challenge increased exponentially; there was the low-price barrier, inflation, adding more features and parts to the vehicle, substantial changes in basic raw materials… What the team has been able to achieve, in the face of all these constraints, is truly outstanding.
What does it mean to me? It means that we have in us the capability to undertake a challenge that many car companies have chosen not to address or have been unable to address.
What are the innovations that have made the Tata Nano possible, from design to product finalisation?
Initially I had conceived a car made by engineering plastics and new materials, and using new technology like aerospace adhesives instead of welding. However, plastics didn't lend themselves to the volumes we wanted because of the curing time required. Volumes mean the world in this context: if we produce this car and if it is for the wider base of the pyramid, we can't settle for small numbers because then the purpose is defeated.
When we were planning facilities for the car and working out a business plan, the business plan shown to me was looking at a figure of 200,000. I said 200,000 cars is crazy. If we can do this we should be looking at a million cars a year, and if we can't do a million then we shouldn't be doing this kind of car at all.
But such a figure (a million cars) has never been achieved in the country before. If it had to be done the conventional way, it would have meant investing many billions of dollars. So we looked at a new kind of distributed manufacturing, creating a low-cost, low break-even point manufacturing unit that we design and give to entrepreneurs who might like to establish a manufacturing facility. We looked at different ways of servicing the product, at the customer's location, and through a concept adopted from the insurance industry, wherein self-employed people are trained and certified by us. And we went back to innovation in design and scrupulously took, as much as we could, cost out of the product.
We did things like make similar handles and mechanisms for the left- and right-side doors; we developed our own small engine which could sit under the rear seat, enabling us to craft a smaller overall package; we looked at a new type of seats; and we worked at cutting costs everywhere. We have put our instrument cluster in the middle, not in front of the driver. This means the same dashboard will work for a left-hand-drive vehicle. There are a lot of such innovations that are low-cost and future-oriented.
Equally important to the cost structure was the incentive we could get from having our manufacturing facility at a particular place. The benefits on this count will be passed on to the customer.
Our move to West Bengal was a leap of faith and a sign of our confidence in the leadership in the state. We were breaking new ground, not only on the product front but also in helping industrialise a previously ignored part of India. But we did not start out getting the incentives that other states were offering. I remember telling the chief minister [Buddhadeb Bhattacharjee], "Sir, much as we have tried, it makes no sense for us to come to West Bengal. We cannot meet the cost requirements we have without incentives." It was then that we negotiated a set of incentives that, long-term, work out to be the same as we may have had if we set up in some other place.
Other than emission norms and safety standards, what are some of the other challenges, physical and psychological, that Tata Motors had to overcome to make this car happen?
There was the usual dilemma of what is basic and what is nice to have. A basic car may not have all the niceties its fancier cousins sport, and when you're looking at saving money on every single bit of the car — even parts that cost as little as Rs20 — you keep facing these dilemmas. Hundreds of such dilemmas have risen.
However, we were always conscious that there should be no quality stigma attached to the buying of this product. One thing we were clear about: this was never going to be a half-car. Nobody wants a car that is less than everybody else's car. Our car may have a small engine and certain limitations in terms of being basic, but that does not make it inferior. Also, we have a higher version of the car - with air conditioning, leather seats, etc - that we will be displaying at the auto show in Delhi. We hope people will look at that, too. Down the line, as we widen our range, we will have dressed-up versions with higher-powered engines, diesel engines, automatics and the like. We have a whole bunch of innovations coming along on this platform.
What we now have is a car that is truly low-cost which has, approximately, the same performance as a Maruti 800 in terms of acceleration, top speed, etc.
When future versions of this car hit the market, will they not be in direct competition to the Indica?
No. The way I see it, this vehicle will cannibalise some of the lower-end car market and some of the higher-end motorcycle and scooter market. It will eat into both of those markets but it will also create a market of its own. It will expand the market by creating a niche that did not previously exist. It may well cannibalise some of the higher-end car market, but to a small extent, and probably only when people look to buy a second or third car.
About the criticism that the car will add to India's pollution problems, why are the Tatas being singled out?
This is something I'm going to talk about at the launch. For now, let me just say our car will cause less pollution than a two-wheeler.
I'm trying to think of a parallel where someone has introduced a product at a disruptively low price and changed the market. A good example would be the Swatch watch, low-cost, trendy and with a wide range. Did Swatch finish off the Swiss watch industry? No (in fact, it was a Swiss company that created Swatch, the same company that produced Omega). Did it finish off Citizen and Seiko and other Japanese competitors? No. Did Swatch cause the Japanese and others to produce something like the Swatch? Yes, it did, but Swatch continued to dominate its niche.
What did this do to the global watch industry? It enabled somebody to look at a wrist watch almost like cufflinks: you could buy 10 Swatch watches, you could wear different ones for different occasions. Swatch sold multiple watches for a single wrist. I think something similar could also happen with the Nano.
Why are people attacking only the Tata Group?
I think it comes from vested interests. Let's ask ourselves why the car is attracting so much attention and why it is being attacked so much. My view is that if the car were not attracting all this attention, it wouldn't be attacked. This car has provoked serious apprehensions in some manufacturers. There are people in our company even who fear what it will do to the Indica. Do you think there's a concern among three-wheel manufacturers that it might replace their vehicles? Yes, there is because some three-wheelers cost more than what the Nano will cost. All in all, I think people are attacking us because they are apprehensive.
Has the Indica experience helped in the creation of the Nano?
Oh yes, enormously. The Indica experience and the Ace experience have helped; Ace especially because it was another tight, cost-based exercise.
From the Rs1-lakh car to products costing many millions, if the Jaguar deal comes through: What next for the Tatas on the automotive front?
I won't comment on the Jaguar deal, but to answer your question, we are not in an acquisitive mode. That's not our strategy for growth.
The Tatas have been on the front pages constantly of late— what is it like being in the middle of it all?
Embarrassing and unpleasant. Whenever you are on the front page, you are also — each time, and more so in India than elsewhere in the world — creating detractors and critics. For every action there is some kind of reaction, somebody who is hunting for something to criticise. And most often it is the reaction that people remember. This is all the more embarrassing because we are not a Group that seeks publicity.
If you look at the coverage that has happened, you cannot fail to notice how the low-cost car has been turned into an issue of congestion, of pollution, of safety. Initially it was all about why a car at this cost was simply not possible; that talk is long gone, only to be replaced by these 'new' concerns. We are not really talking about how it will change the way people live or transport themselves, what their aspirations may be.
Ideally, I would really wish we didn't have the visibility and the media publicity because we haven't sought it.
People's Car - Some Info
Tata Motors' plans would produce, in real terms, by far the cheapest car ever made.
An Indian car may soon earn a parking place in history alongside Ford's Model T, Volkswagen's Beetle and the British Motor Corp.'s Mini, all of which put a set of wheels within reach of millions of customers after they rolled onto the scene. Tata Motors (nyse: TTM - news - people ) is developing a car it aims to sell for about $2,500 the cheapest, by far, ever made.
There is a lot riding on its small wheels. If the yet-to-be-named car is a success when it goes on sale next year, it would herald the emergence of Tata Motors on the global auto scene, mark the advent of India as a global center for small-car production and represent a victory for those who advocate making cheap goods for potential customers at the "bottom of the pyramid" in emerging markets. Most of all, it would give millions of people now relegated to lesser means of transportation the chance to drive cars.
It is a hugely ambitious project rivals have called it impossible for any company. But it is audacious for one that hadn't even built cars a decade ago.
For decades Tata Motors has been India's largest commercial vehicle maker the Tata logo appears on buses, dump trucks, ambulances and cement mixers. Sturdy as elephants, they are a fixture of the Indian landscape. Owners inevitably paint the exteriors in a cheerful riot of bright red, green, orange, blue and yellow and line the un-air-conditioned cabs with teakwood to keep them cooler in India's searing heat.
However ubiquitous, Tata's trucks faced a problem after the Indian government began reforms that opened the Indian economy in 1991: the huge cyclical swings in demand typical for commercial vehicles. To diversify, Tata would enter, at great expense, the less volatile passenger car market.
Before the reforms Indian customers had so few choices that Tata was sheltered. When demand tailed off it just worked down a waiting list, and there was never a need to concern itself with customer desires. Sure enough, after the economy slumped in the late 1990s just when expenses for developing the passenger car hit home Tata truck and bus sales plunged by 40%, and Tata Motors lost $110 million in fiscal 2000. It was the first red ink seen since 1945, when the company was founded to make locomotives. Executives were stunned. "It was corporate India's biggest loss," says Ravi Kant, managing director of Tata Motors. "The crisis changed us. We told ourselves, 'Never again.'"
But Tata Motors, part of India's largest conglomerate, first had to reset its ways. Like many Indian companies protected for decades from foreign competition, Tata had gotten to 2000 still fat and slow.
Change started with a spring 2000 meeting at the Lakehouse, a bungalow across the street from the company's main factory in Pune, a three-hour drive east of Mumbai. Kant, then in charge of the commercial vehicle division, needed fresh ideas instead of rigid resistance, so in an experiment, he called a meeting of 20 of his most promising young managers all under 35 years old.
"I have a problem," he said in his matter-of-fact tone. "The company is bleeding." He asked for ideas on how to stop the gush of red ink. Okay, they told him, trim costs.
Girish Wagh was there, just 29 then. He remembers the shock of what came next. "Ravi Kant said that 1% in cost cuts would be a rounding error. He asked for 10%!" says Wagh. "Never had we thought of such a target." Every single year until then costs had gone up, not down. Kant told them to present a basic plan that very afternoon, in front of him and alarmingly all their bosses.
They worked frantically. By the 3 p.m. meeting, their wildest ideas were on the table. Taken together, they added up to 6.5%. "A breakthrough!" Kant remembers thinking. But that's not what he said. "Please go back and think again," he told them. He needed 10%, not 6.5%. "You've got three weeks." The young team took some measures even as it scrounged for more. In came benchmarking, purchasing from Internet auctions, outsourcing parts to more efficient suppliers and boosting revenue by selling Tata-made dies to other companies. Meanwhile, the Pune factory's veteran boss bought into the project.
The transformation of Tata Motors had begun with the searing loss in 2000, but it continued with a return to profit in the fiscal year ending March 2003. By then it was producing two car models and selling a bit abroad. Today, after buying or partnering, the company has vehicle projects around the globe and exports 11% of output, mostly to South Africa.
Efficiency is way up: It now takes between 12 and 15 minutes to change a die on the passenger car assembly line, down from two hours in 2000. The company's break-even point for capacity utilization is one of the best in the industry worldwide. Between 2000 and 2006 nearly 6,000 workers left the company with early-retirement deals. Meanwhile, the once radical e-sourcing idea has become routine for Tata, which ran 750 reverse auctions on Ariba in the past year to bring down purchasing prices by an average of 7% for everything from ball bearings to the milk served in the company cafeteria. Tata Motors listed on the New York Stock Exchange in 2004. After thousands of changes, in the quarter ending December 2006 Tata earned $116 million on revenue of $1.55 billion. Annual revenue grew to $5.2 billion for the fiscal year ending in March 2006. Analysts worry that high product development costs and rising commodities prices could lower profit margins for the next few quarters.
The changes at Tata Motors are coming as India itself is transforming. With economic growth charging along at 9% last year, more and more Indians can afford cars. But on the highway from Mumbai to Pune, the new cars zoom past wooden carts filled with construction materials and pulled by ponies, camels, elephants or even people. Roadside markets offer chickens and geese those chosen are slaughtered on the spot and usually carried home on motor scooters. Outside the Tata Motors gates in Pune, a woman in a flowing red sari balances a 3-foot-wide basket on her head. It holds snacks and drinks and serves as a roving roadside shop.
Inside the company gates is a modern factory complex. In one building, just past a small statue of the beloved Hindu elephant god Ganesha, robots pick up pieces of sheet metal and feed them into a series of 30-foot-tall stamping presses every ten seconds until the left-side door of a Tata Safari suv is formed. In a building nearby, workers in navy-blue uniforms use computer-aided designs from Tata engineers to create tools and dies used to make those sheet-metal stampings. Tata Motors boosts its revenue by making dies for Jaguar, Ford, General Motors (nyse: GM - news - people ) and Toyota (nyse: TM - news - people ), too, just as it does by allowing the made-in-India Mercedes to be run through its paint shop.
Workers at the Tata Motors factory have been trained in Japanese manufacturing techniques that call for continuous improvement. A worker building Safaris noticed that each day on average, one front grille was ruined when a worker leaned over to work on the engine and accidentally scratched the grille with his belt buckle. Cost: about 2,500 rupees $57 a day, or $17,000 a year. Tata designed a simple protective cover for the grilles, plus a slip-on fabric cover for belts and watches that is now used to cut down on expensive waste at each of Tata Motors' factories. Cost: about 25 cents per vehicle.
That's the sort of thing that Girish Wagh, one of the breakfast-meeting whiz kids, was working to foster when Kant called him in unexpectedly in December 2000. Kant needed someone to take on a risky project to extend the truck line beyond the sturdy Tata mainstays. Kant wanted one cheap enough to compete with three-wheeled, motorized rickshaws and even considered building a small, three-wheeled truck.
Before starting the project, Wagh did something no one at Tata Motors ever had: He talked to customers. The three-wheeler men inevitably insisted on a cheap, dependable truck that could go from village to market carrying, say, 200 chickens, a ton of onions or potatoes, or 2,000 eggs. One night, as sunset approached, Wagh stuck with one rickshaw driver. "I kept asking the question. Why? Why? Why do you want a four-wheeler?" Wagh remembered. Finally, he got the real answer. It turned out it wasn't really a problem of chickens or eggs. "If I had a four-wheeler, I would have better marriage prospects in my village," the young man said. Drivers of three-wheelers are looked down upon in India. Wagh realized that four wheels had emotional, not just practical, appeal.
When Tata Motors brought out the bare-bones Ace truck in May 2005 for just $5,100, it had a monster hit: The company sold 100,000 in 20 months. To try to keep up with demand, it offers the truck only in white to save the time it takes to change colors in the factory paint shop. Tata is building a new factory that will be able to turn out 250,000 a year starting this month.
So when Tata Motors needed someone to take charge of the company's most ambitious plan yet to build the world's cheapest car ever Ravi Kant, who by then had become the company's managing director, again turned to Wagh. Wagh remembers what he learned marketing the little truck. "People want to move from two-wheelers to four-wheelers," he says. "Today they can't afford it."
More and more can, but Indian car buyers today represent a tiny slice of a potentially giant market India has just seven cars per 1,000 people. India's auto industry has grown an average of 12% for the past decade, but just 1.3 million passenger vehicles were sold in India in the fiscal year ending March 2006. That means a billion Indians buy about the same number of cars in a year as 300 million Americans buy in a month.
If four wheels cost as little as two wheels, that could change fast. About 7 million scooters and motorcycles were sold in India last year, typically for prices between 30,000 rupees and 70,000 rupees, about $675 to $1,600. Tata is targeting a price of 100,000 rupees one lakh, in Indian terms of measurement or about $2,500 at current exchange rates, for its small car. That sounds impossibly cheap in the West but remains three times higher than India's annual per capita income. The average pay for factory workers at Tata Motors is just $5,500 a year.
Within a few years 2 million of those motorcycle owners may trade up to buy the Tata car, figures McKinsey and Co. partner Ramesh Mangaleswaran in Mumbai.
Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed crazy several years ago when Ratan Tata, longtime chairman of Tata Motors and scion of the nation's giant Tata Group conglomerate, first mentioned his dream of building a one-lakh car in 2003. "They are still saying it can't be done," he says, insisting that it can and will. "Everybody is talking of small cars as $5,000 or $7,000. After we get done with it, there will hopefully be a new definition of low-cost."
Many low-cost car producers have set up shop in India, and McKinsey believes it could become a global hub for small-car production the way the U.S. is for pickups. Hyundai and Suzuki (other-otc: SZKMF.PK - news - people ) build their small cars in India, and Toyota is considering an India hub. Passenger vehicle exports grew by 13% last year to 192,000, according to J.D. Power and Associates, with Hyundai exporting more than 110,000.
A one-lakh car is unlikely to be sold in the U.S. . But it wouldn't be aimed only at India, either, Ratan Tata says. Bottom-of-the-pyramid markets would be the best fit: places like Africa, Southeast Asia and maybe eastern Europe and Latin America, wherever income levels mirror India's.
The cost target is tough, but there are plenty of other hurdles at home. India's inadequate roads, for one. Roads and highways are being built nationwide, but if India goes car crazy, maddeningly slow traffic is inevitable for several years. By far the biggest struggle in India is political. The People's Car factory is already caught in the crossfire, as politicians and pressure groups squabble over forcing destitute farmers off their land for a project expected to bring 10,000 jobs to industry-hungry West Bengal. The company signed the final deal with the state last month and has begun the property's boundary walls, land leveling, and road and building plans. "We've lost four months," says Ratan Tata. So far. He is still personally driving the People's Car project. It is a rear-engined, four-door, four-seat car that will get around on 33hp more pep than the Model T or the VW Beetle had when they drove onto the scene. The cheapest versions won't have air-conditioning or power steering, but Tata hopes its cute looks will make up for missing creature comforts just as happened with the VW Beetle and the Mini long before it.
Tata Motors has not released a photo of its prototypes, but Ratan Tata, a trained architect with a penchant for designing consumer goods, sketched its outlines for a reporter's eyes only. He drew an egg-shaped car with a ceiling high enough to handle his tall frame. He pointed proudly to the air intake scoop in front of the rear tires and the vertical taillights similar to those found on the Tata Indica. Under the front hood it will have a small storage space, "like an overhead bin" on an airplane, Tata says. "It is not as small as a Smart," he says. "It is not a car with plastic curtains or no roof it's a real car."
The design was outsourced to Italy's Institute of Development in Automotive Engineering, but Tata himself ordered changes along the way. Most recently he vetoed the design of the windshield wipers. His solution: a single wiper instead of two, giving the car a cleaner look.
And cutting the cost of windshield wipers for the People's Car in half.
An Indian car may soon earn a parking place in history alongside Ford's Model T, Volkswagen's Beetle and the British Motor Corp.'s Mini, all of which put a set of wheels within reach of millions of customers after they rolled onto the scene. Tata Motors (nyse: TTM - news - people ) is developing a car it aims to sell for about $2,500 the cheapest, by far, ever made.
There is a lot riding on its small wheels. If the yet-to-be-named car is a success when it goes on sale next year, it would herald the emergence of Tata Motors on the global auto scene, mark the advent of India as a global center for small-car production and represent a victory for those who advocate making cheap goods for potential customers at the "bottom of the pyramid" in emerging markets. Most of all, it would give millions of people now relegated to lesser means of transportation the chance to drive cars.
It is a hugely ambitious project rivals have called it impossible for any company. But it is audacious for one that hadn't even built cars a decade ago.
For decades Tata Motors has been India's largest commercial vehicle maker the Tata logo appears on buses, dump trucks, ambulances and cement mixers. Sturdy as elephants, they are a fixture of the Indian landscape. Owners inevitably paint the exteriors in a cheerful riot of bright red, green, orange, blue and yellow and line the un-air-conditioned cabs with teakwood to keep them cooler in India's searing heat.
However ubiquitous, Tata's trucks faced a problem after the Indian government began reforms that opened the Indian economy in 1991: the huge cyclical swings in demand typical for commercial vehicles. To diversify, Tata would enter, at great expense, the less volatile passenger car market.
Before the reforms Indian customers had so few choices that Tata was sheltered. When demand tailed off it just worked down a waiting list, and there was never a need to concern itself with customer desires. Sure enough, after the economy slumped in the late 1990s just when expenses for developing the passenger car hit home Tata truck and bus sales plunged by 40%, and Tata Motors lost $110 million in fiscal 2000. It was the first red ink seen since 1945, when the company was founded to make locomotives. Executives were stunned. "It was corporate India's biggest loss," says Ravi Kant, managing director of Tata Motors. "The crisis changed us. We told ourselves, 'Never again.'"
But Tata Motors, part of India's largest conglomerate, first had to reset its ways. Like many Indian companies protected for decades from foreign competition, Tata had gotten to 2000 still fat and slow.
Change started with a spring 2000 meeting at the Lakehouse, a bungalow across the street from the company's main factory in Pune, a three-hour drive east of Mumbai. Kant, then in charge of the commercial vehicle division, needed fresh ideas instead of rigid resistance, so in an experiment, he called a meeting of 20 of his most promising young managers all under 35 years old.
"I have a problem," he said in his matter-of-fact tone. "The company is bleeding." He asked for ideas on how to stop the gush of red ink. Okay, they told him, trim costs.
Girish Wagh was there, just 29 then. He remembers the shock of what came next. "Ravi Kant said that 1% in cost cuts would be a rounding error. He asked for 10%!" says Wagh. "Never had we thought of such a target." Every single year until then costs had gone up, not down. Kant told them to present a basic plan that very afternoon, in front of him and alarmingly all their bosses.
They worked frantically. By the 3 p.m. meeting, their wildest ideas were on the table. Taken together, they added up to 6.5%. "A breakthrough!" Kant remembers thinking. But that's not what he said. "Please go back and think again," he told them. He needed 10%, not 6.5%. "You've got three weeks." The young team took some measures even as it scrounged for more. In came benchmarking, purchasing from Internet auctions, outsourcing parts to more efficient suppliers and boosting revenue by selling Tata-made dies to other companies. Meanwhile, the Pune factory's veteran boss bought into the project.
The transformation of Tata Motors had begun with the searing loss in 2000, but it continued with a return to profit in the fiscal year ending March 2003. By then it was producing two car models and selling a bit abroad. Today, after buying or partnering, the company has vehicle projects around the globe and exports 11% of output, mostly to South Africa.
Efficiency is way up: It now takes between 12 and 15 minutes to change a die on the passenger car assembly line, down from two hours in 2000. The company's break-even point for capacity utilization is one of the best in the industry worldwide. Between 2000 and 2006 nearly 6,000 workers left the company with early-retirement deals. Meanwhile, the once radical e-sourcing idea has become routine for Tata, which ran 750 reverse auctions on Ariba in the past year to bring down purchasing prices by an average of 7% for everything from ball bearings to the milk served in the company cafeteria. Tata Motors listed on the New York Stock Exchange in 2004. After thousands of changes, in the quarter ending December 2006 Tata earned $116 million on revenue of $1.55 billion. Annual revenue grew to $5.2 billion for the fiscal year ending in March 2006. Analysts worry that high product development costs and rising commodities prices could lower profit margins for the next few quarters.
The changes at Tata Motors are coming as India itself is transforming. With economic growth charging along at 9% last year, more and more Indians can afford cars. But on the highway from Mumbai to Pune, the new cars zoom past wooden carts filled with construction materials and pulled by ponies, camels, elephants or even people. Roadside markets offer chickens and geese those chosen are slaughtered on the spot and usually carried home on motor scooters. Outside the Tata Motors gates in Pune, a woman in a flowing red sari balances a 3-foot-wide basket on her head. It holds snacks and drinks and serves as a roving roadside shop.
Inside the company gates is a modern factory complex. In one building, just past a small statue of the beloved Hindu elephant god Ganesha, robots pick up pieces of sheet metal and feed them into a series of 30-foot-tall stamping presses every ten seconds until the left-side door of a Tata Safari suv is formed. In a building nearby, workers in navy-blue uniforms use computer-aided designs from Tata engineers to create tools and dies used to make those sheet-metal stampings. Tata Motors boosts its revenue by making dies for Jaguar, Ford, General Motors (nyse: GM - news - people ) and Toyota (nyse: TM - news - people ), too, just as it does by allowing the made-in-India Mercedes to be run through its paint shop.
Workers at the Tata Motors factory have been trained in Japanese manufacturing techniques that call for continuous improvement. A worker building Safaris noticed that each day on average, one front grille was ruined when a worker leaned over to work on the engine and accidentally scratched the grille with his belt buckle. Cost: about 2,500 rupees $57 a day, or $17,000 a year. Tata designed a simple protective cover for the grilles, plus a slip-on fabric cover for belts and watches that is now used to cut down on expensive waste at each of Tata Motors' factories. Cost: about 25 cents per vehicle.
That's the sort of thing that Girish Wagh, one of the breakfast-meeting whiz kids, was working to foster when Kant called him in unexpectedly in December 2000. Kant needed someone to take on a risky project to extend the truck line beyond the sturdy Tata mainstays. Kant wanted one cheap enough to compete with three-wheeled, motorized rickshaws and even considered building a small, three-wheeled truck.
Before starting the project, Wagh did something no one at Tata Motors ever had: He talked to customers. The three-wheeler men inevitably insisted on a cheap, dependable truck that could go from village to market carrying, say, 200 chickens, a ton of onions or potatoes, or 2,000 eggs. One night, as sunset approached, Wagh stuck with one rickshaw driver. "I kept asking the question. Why? Why? Why do you want a four-wheeler?" Wagh remembered. Finally, he got the real answer. It turned out it wasn't really a problem of chickens or eggs. "If I had a four-wheeler, I would have better marriage prospects in my village," the young man said. Drivers of three-wheelers are looked down upon in India. Wagh realized that four wheels had emotional, not just practical, appeal.
When Tata Motors brought out the bare-bones Ace truck in May 2005 for just $5,100, it had a monster hit: The company sold 100,000 in 20 months. To try to keep up with demand, it offers the truck only in white to save the time it takes to change colors in the factory paint shop. Tata is building a new factory that will be able to turn out 250,000 a year starting this month.
So when Tata Motors needed someone to take charge of the company's most ambitious plan yet to build the world's cheapest car ever Ravi Kant, who by then had become the company's managing director, again turned to Wagh. Wagh remembers what he learned marketing the little truck. "People want to move from two-wheelers to four-wheelers," he says. "Today they can't afford it."
More and more can, but Indian car buyers today represent a tiny slice of a potentially giant market India has just seven cars per 1,000 people. India's auto industry has grown an average of 12% for the past decade, but just 1.3 million passenger vehicles were sold in India in the fiscal year ending March 2006. That means a billion Indians buy about the same number of cars in a year as 300 million Americans buy in a month.
If four wheels cost as little as two wheels, that could change fast. About 7 million scooters and motorcycles were sold in India last year, typically for prices between 30,000 rupees and 70,000 rupees, about $675 to $1,600. Tata is targeting a price of 100,000 rupees one lakh, in Indian terms of measurement or about $2,500 at current exchange rates, for its small car. That sounds impossibly cheap in the West but remains three times higher than India's annual per capita income. The average pay for factory workers at Tata Motors is just $5,500 a year.
Within a few years 2 million of those motorcycle owners may trade up to buy the Tata car, figures McKinsey and Co. partner Ramesh Mangaleswaran in Mumbai.
Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed crazy several years ago when Ratan Tata, longtime chairman of Tata Motors and scion of the nation's giant Tata Group conglomerate, first mentioned his dream of building a one-lakh car in 2003. "They are still saying it can't be done," he says, insisting that it can and will. "Everybody is talking of small cars as $5,000 or $7,000. After we get done with it, there will hopefully be a new definition of low-cost."
Many low-cost car producers have set up shop in India, and McKinsey believes it could become a global hub for small-car production the way the U.S. is for pickups. Hyundai and Suzuki (other-otc: SZKMF.PK - news - people ) build their small cars in India, and Toyota is considering an India hub. Passenger vehicle exports grew by 13% last year to 192,000, according to J.D. Power and Associates, with Hyundai exporting more than 110,000.
A one-lakh car is unlikely to be sold in the U.S. . But it wouldn't be aimed only at India, either, Ratan Tata says. Bottom-of-the-pyramid markets would be the best fit: places like Africa, Southeast Asia and maybe eastern Europe and Latin America, wherever income levels mirror India's.
The cost target is tough, but there are plenty of other hurdles at home. India's inadequate roads, for one. Roads and highways are being built nationwide, but if India goes car crazy, maddeningly slow traffic is inevitable for several years. By far the biggest struggle in India is political. The People's Car factory is already caught in the crossfire, as politicians and pressure groups squabble over forcing destitute farmers off their land for a project expected to bring 10,000 jobs to industry-hungry West Bengal. The company signed the final deal with the state last month and has begun the property's boundary walls, land leveling, and road and building plans. "We've lost four months," says Ratan Tata. So far. He is still personally driving the People's Car project. It is a rear-engined, four-door, four-seat car that will get around on 33hp more pep than the Model T or the VW Beetle had when they drove onto the scene. The cheapest versions won't have air-conditioning or power steering, but Tata hopes its cute looks will make up for missing creature comforts just as happened with the VW Beetle and the Mini long before it.
Tata Motors has not released a photo of its prototypes, but Ratan Tata, a trained architect with a penchant for designing consumer goods, sketched its outlines for a reporter's eyes only. He drew an egg-shaped car with a ceiling high enough to handle his tall frame. He pointed proudly to the air intake scoop in front of the rear tires and the vertical taillights similar to those found on the Tata Indica. Under the front hood it will have a small storage space, "like an overhead bin" on an airplane, Tata says. "It is not as small as a Smart," he says. "It is not a car with plastic curtains or no roof it's a real car."
The design was outsourced to Italy's Institute of Development in Automotive Engineering, but Tata himself ordered changes along the way. Most recently he vetoed the design of the windshield wipers. His solution: a single wiper instead of two, giving the car a cleaner look.
And cutting the cost of windshield wipers for the People's Car in half.
Those who criticise the Tata small car are barking up the wrong tree...!
Those who criticise the Tata small car are barking up the wrong tree and some of their arguments are elitist and discriminatory.
"India is in serious danger", warned the hugely popular New York Times columnist Thomas Friedman last November in one of his columns. The danger, he said, is from the $2,500-Tata small car which he believes is a highly retrograde initiative from a country capable of incredible innovation.
Why is Friedman so worried about a car that may never be seen on American roads? Because, he is very concerned about the well-being of us Indians! He is worried that we will make an even bigger mess of our road traffic and pollute our way to motoring bliss. He even asked Americans to urge Indians not to imitate the indulgent American way of life, but leapfrog and invent 'cheap-scale', sustainable solutions to big problems like public transport.
On the face of it, the column reads like yet another patronising sermon from a westerner baulking at the thought of third world masses enjoying cheap personal transport the way Americans do. But Friedman, a three times Pulitzer prize winner, is unlikely to harbour any prejudice against India and Indians.
After all, one of his biggest claims to fame is a true 'eureka moment' when it dawned on him that 'the world is flat' - while playing golf in Bangalore! The picture of Bangalore he paints in that book, with gleaming skyscrapers housing development centres for Microsoft, Sun and Oracle adorning his view from the golf course, would easily beat BJP's old 'India Shining' campaign. Tom Friedman is not alone in deriding the Tata small car.
Ever since Ratan Tata announced his intention to build the cheapest car ever, there has been no let up from a variety of Tata baiters. Some competitors ridiculed the idea and questioned the company's ability to launch a car at such a low price. Green activists and 'concerned' souls, much before it caught Friedman's attention, have been warning us of the terrible fate that awaits us if the small car becomes a reality. Their objections range from vehicle safety to pollution and some of them sound plain elitist in their arguments.
The elite who pretend to be liberals
Last year, a columnist in a major Indian financial newspaper wondered how this country could allow a product like the Tata small car that would make our urban lives messier and all the more tedious. This is one of the biggest complaints against the Tata small car. But the question is, messier and tedious for whom? Obviously the urban rich, for the lives of the urban lower middle class and the poor cannot be made any messier! So, those who cannot afford more expensive cars must stick to their motorbikes so that the rich can continue to enjoy comfortable rides in thin traffic!
Another curious argument is that most of the potential buyers of the Tata car would have no parking space at their homes. So, it is said, they will all start parking their puny little cars by the roadside and clog traffic. A car manufacturer cannot be asked to sell to only those who have their own parking space. It is the potential buyers' problem to find a safe parking space. If they cannot find adequate parking space, or find parking to be very expensive, they will not take out their cars very often or will abstain from buying them in the worst case.
Given our 'highly developed civic sense' and 'ready willingness to obey the rules', it is likely that many of the new small car owners would conveniently park their vehicles where they should not. But, doesn't that happen even now with those who can afford expensive cars? It is the rich who flout traffic rules more blatantly and it is very likely that cars left at 'no parking' areas will be the most expensive ones because they know the traffic policeman will usually not dare to touch the 'sahib's gaadi'.
When that is the case, this argument smacks of blatant elitism. The less affluent cannot be denied the safety and comfort of a cheap four-wheeled vehicle, only because the existing infrastructure will come under further strain. Any move to restrict the number of cars should apply to all vehicles, irrespective of their cost. Even then, it should be ensured that the costs of such measures - like increased road taxes and parking charges - should be proportionate to the owners' ability to pay. Anything else will be discriminatory and simply unfair.
The safety bogey
Another potential fault critics have come up with is safety. "When you lower prices that drastically, how will you be able to meet safety standards?" - Anumita Roychoudhury of the Centre for Science and Environment (CES), one of the most-quoted critics of the Tata car, is reported to have asked. Does she really believe that there are no safety standards for vehicles in India? Even if they are inadequate, are we supposed to believe that a manufacturer from the House of Tatas, would risk its reputation and compromise on safety just to cut costs?
Even if the Tata small car is deemed less safe in terms of passenger injuries in the event of a collision, we need to remember that nobody in their right senses would enter such a car in a drag race! Neither will any sensible driver try to test the car's speed limit on our dangerous highways. Most potential buyers, ordinary middle class buyers, will drive the car to work or take their families for an outing on weekends.
Is the probability of high speed collisions on our city roads, where the average speed is in the range of 20 to 30 kmph, so high? In high-speed highway collisions, will the passengers in other small cars like the Maruti 800, Alto or even a Santro fare any better?
Furthermore, won't the Tata small car be far safer for lower middle class families who now use motorcycles and scooters with only the rider wearing a safety helmet in equally "dangerous" traffic conditions?
Roychoudhury has also argued that the Tata car has "not much chance" of retaining its price tag when safety features like airbags and anti-lock brakes are made standard in all vehicles. It is Ratan Tata who should worry about that, not his detractors. Oh! Shouldn't his critics be happier if the car becomes costlier and beyond the reach of its target customers!
The pollution bogey
R K Pachauri, with all the added gravitas from the Nobel Peace Prize, said the Tata small car is giving him "nightmares" - presumably implying the environmental impact of emissions from more cars on our streets. He is one of the biggest stars of the global warming campaigners, second only to Al Gore, and it is understandable that he gets nightmares. Just when he and his scientists and experts had convinced the sceptics that global warming was for real, here is a company from his own country, which he believes, is hell bent on worsening the problem!
Roychoudhury of CES is worried that "we have a time bomb ticking away" in terms of the environmental impact of hundreds of thousands of Tata small cars that will flood the streets in the coming years. Others are no less appalled or frightened. But, how real is the potential pollution problem posed by the Tata small car?
Ratan Tata has said that the car's emissions will be comparable to two-wheelers on a per passenger basis. That is assuming that the car will always have four passengers, which is unlikely. So, if the car replaces as many two-wheelers on our roads, total emissions will undoubtedly be higher.
But there is a potential upside, too. The Tata small car is said to be twice as fuel-efficient as other small cars. So, if some of the existing and potential owners of other small cars switch to the new car, the increase in overall fuel demand and emissions will be lower.
Again, it is not that millions of Tata small cars will be rolled out every year. Tata Motors' current capacity is 250,000 units per year, which is less than a quarter of the total cars produced in the country. In the long run, yes, the number of Tata small cars on our roads could be in millions. But, the number of other small car models sold over a period of as many years will also run into millions. Then, why single out the Tata car for criticism?
The Tata small car will definitely increase the pace of passenger car sales. But, the incremental addition to total car sales may not be as high as it is being made out to be. On balance, potential emissions are not the "nightmare" critics want us to believe.
The traffic chaos bogey
More cars on roads definitely mean more congestion. But, will the Tata small car make it that worse as some fear? It is estimated that there are over 12 million vehicles in India - four wheelers and above. Around a million are being added every year, and the additions will only increase. If Tata Motors sells as much as it can produce, we will see 250,000 cars being added every year. By the time the company reaches full capacity, at the earliest in 2009-10, total number of vehicles will be around 15 million. In percentage terms, the Tata small cars will constitute less than 2 per cent of total vehicles on our roads. Even if the company doubles its capacity, it will still be less than 4 per cent. Is that a big problem?
Our roads are congested in urban areas, not so much in semi-urban and rural areas. It is likely that a substantial number of Tata small cars will be sold in areas where the road traffic is not that bad. So, should the village aam aadmi also be denied a cheap personal vehicle?
Even if the Tata small cars create utter traffic chaos in our cities, it may be a blessing in disguise. The transport infrastructure in our cities is pathetic probably because our netas never have to suffer traffic blocks. The big shots, who take all the decisions, have police vehicles clearing the way for them.
The lesser minions, who lobby to influence the decisions, are usually chauffeured around and hence commuting is less tedious for them. So, to take a highly charitable view on our netas, it is possible that they are really not aware of the problems. When we protest loudly, they will agree to 'look into the matter', without really grasping the enormity of the problem and hence cannot be blamed for forgetting the promise.
But, they will grasp the problem better and will be forced to 'look into it' if their cars cannot move. For them to roll down their windows and see reality, the traffic should become so bad that even police vehicles cannot clear the way. Then they will do something about our roads or let the private sector do it.
I am all for mass transport systems - metro rail systems, high capacity buses on dedicated lanes and so on - for our cities. Many commuters would prefer public transport to driving their own cars, provided they are safe, comfortable and reliable. There is no doubt that, in the not too distant future, a majority of city dwellers will switch to public transport from cars. Because it will be impossible to take out the cars daily and our public transport systems would have improved beyond recognition by then.
But, that will be a gradual transition. All we can do is to exert pressure to speed up the process, and that is what all the activists railing against the Tata small car should be doing. Until we have better public transport, commuters would prefer personal transport - if they can afford it - and there will be huge demand for personal vehicles. You cannot fault a business for trying to meet market demand, in a supposedly liberalised economy. If the Tatas had not done it, somebody else would have. Bajaj already has a prototype ready!
All those who are arguing against the Tata small car are barking up the wrong tree!
"India is in serious danger", warned the hugely popular New York Times columnist Thomas Friedman last November in one of his columns. The danger, he said, is from the $2,500-Tata small car which he believes is a highly retrograde initiative from a country capable of incredible innovation.
Why is Friedman so worried about a car that may never be seen on American roads? Because, he is very concerned about the well-being of us Indians! He is worried that we will make an even bigger mess of our road traffic and pollute our way to motoring bliss. He even asked Americans to urge Indians not to imitate the indulgent American way of life, but leapfrog and invent 'cheap-scale', sustainable solutions to big problems like public transport.
On the face of it, the column reads like yet another patronising sermon from a westerner baulking at the thought of third world masses enjoying cheap personal transport the way Americans do. But Friedman, a three times Pulitzer prize winner, is unlikely to harbour any prejudice against India and Indians.
After all, one of his biggest claims to fame is a true 'eureka moment' when it dawned on him that 'the world is flat' - while playing golf in Bangalore! The picture of Bangalore he paints in that book, with gleaming skyscrapers housing development centres for Microsoft, Sun and Oracle adorning his view from the golf course, would easily beat BJP's old 'India Shining' campaign. Tom Friedman is not alone in deriding the Tata small car.
Ever since Ratan Tata announced his intention to build the cheapest car ever, there has been no let up from a variety of Tata baiters. Some competitors ridiculed the idea and questioned the company's ability to launch a car at such a low price. Green activists and 'concerned' souls, much before it caught Friedman's attention, have been warning us of the terrible fate that awaits us if the small car becomes a reality. Their objections range from vehicle safety to pollution and some of them sound plain elitist in their arguments.
The elite who pretend to be liberals
Last year, a columnist in a major Indian financial newspaper wondered how this country could allow a product like the Tata small car that would make our urban lives messier and all the more tedious. This is one of the biggest complaints against the Tata small car. But the question is, messier and tedious for whom? Obviously the urban rich, for the lives of the urban lower middle class and the poor cannot be made any messier! So, those who cannot afford more expensive cars must stick to their motorbikes so that the rich can continue to enjoy comfortable rides in thin traffic!
Another curious argument is that most of the potential buyers of the Tata car would have no parking space at their homes. So, it is said, they will all start parking their puny little cars by the roadside and clog traffic. A car manufacturer cannot be asked to sell to only those who have their own parking space. It is the potential buyers' problem to find a safe parking space. If they cannot find adequate parking space, or find parking to be very expensive, they will not take out their cars very often or will abstain from buying them in the worst case.
Given our 'highly developed civic sense' and 'ready willingness to obey the rules', it is likely that many of the new small car owners would conveniently park their vehicles where they should not. But, doesn't that happen even now with those who can afford expensive cars? It is the rich who flout traffic rules more blatantly and it is very likely that cars left at 'no parking' areas will be the most expensive ones because they know the traffic policeman will usually not dare to touch the 'sahib's gaadi'.
When that is the case, this argument smacks of blatant elitism. The less affluent cannot be denied the safety and comfort of a cheap four-wheeled vehicle, only because the existing infrastructure will come under further strain. Any move to restrict the number of cars should apply to all vehicles, irrespective of their cost. Even then, it should be ensured that the costs of such measures - like increased road taxes and parking charges - should be proportionate to the owners' ability to pay. Anything else will be discriminatory and simply unfair.
The safety bogey
Another potential fault critics have come up with is safety. "When you lower prices that drastically, how will you be able to meet safety standards?" - Anumita Roychoudhury of the Centre for Science and Environment (CES), one of the most-quoted critics of the Tata car, is reported to have asked. Does she really believe that there are no safety standards for vehicles in India? Even if they are inadequate, are we supposed to believe that a manufacturer from the House of Tatas, would risk its reputation and compromise on safety just to cut costs?
Even if the Tata small car is deemed less safe in terms of passenger injuries in the event of a collision, we need to remember that nobody in their right senses would enter such a car in a drag race! Neither will any sensible driver try to test the car's speed limit on our dangerous highways. Most potential buyers, ordinary middle class buyers, will drive the car to work or take their families for an outing on weekends.
Is the probability of high speed collisions on our city roads, where the average speed is in the range of 20 to 30 kmph, so high? In high-speed highway collisions, will the passengers in other small cars like the Maruti 800, Alto or even a Santro fare any better?
Furthermore, won't the Tata small car be far safer for lower middle class families who now use motorcycles and scooters with only the rider wearing a safety helmet in equally "dangerous" traffic conditions?
Roychoudhury has also argued that the Tata car has "not much chance" of retaining its price tag when safety features like airbags and anti-lock brakes are made standard in all vehicles. It is Ratan Tata who should worry about that, not his detractors. Oh! Shouldn't his critics be happier if the car becomes costlier and beyond the reach of its target customers!
The pollution bogey
R K Pachauri, with all the added gravitas from the Nobel Peace Prize, said the Tata small car is giving him "nightmares" - presumably implying the environmental impact of emissions from more cars on our streets. He is one of the biggest stars of the global warming campaigners, second only to Al Gore, and it is understandable that he gets nightmares. Just when he and his scientists and experts had convinced the sceptics that global warming was for real, here is a company from his own country, which he believes, is hell bent on worsening the problem!
Roychoudhury of CES is worried that "we have a time bomb ticking away" in terms of the environmental impact of hundreds of thousands of Tata small cars that will flood the streets in the coming years. Others are no less appalled or frightened. But, how real is the potential pollution problem posed by the Tata small car?
Ratan Tata has said that the car's emissions will be comparable to two-wheelers on a per passenger basis. That is assuming that the car will always have four passengers, which is unlikely. So, if the car replaces as many two-wheelers on our roads, total emissions will undoubtedly be higher.
But there is a potential upside, too. The Tata small car is said to be twice as fuel-efficient as other small cars. So, if some of the existing and potential owners of other small cars switch to the new car, the increase in overall fuel demand and emissions will be lower.
Again, it is not that millions of Tata small cars will be rolled out every year. Tata Motors' current capacity is 250,000 units per year, which is less than a quarter of the total cars produced in the country. In the long run, yes, the number of Tata small cars on our roads could be in millions. But, the number of other small car models sold over a period of as many years will also run into millions. Then, why single out the Tata car for criticism?
The Tata small car will definitely increase the pace of passenger car sales. But, the incremental addition to total car sales may not be as high as it is being made out to be. On balance, potential emissions are not the "nightmare" critics want us to believe.
The traffic chaos bogey
More cars on roads definitely mean more congestion. But, will the Tata small car make it that worse as some fear? It is estimated that there are over 12 million vehicles in India - four wheelers and above. Around a million are being added every year, and the additions will only increase. If Tata Motors sells as much as it can produce, we will see 250,000 cars being added every year. By the time the company reaches full capacity, at the earliest in 2009-10, total number of vehicles will be around 15 million. In percentage terms, the Tata small cars will constitute less than 2 per cent of total vehicles on our roads. Even if the company doubles its capacity, it will still be less than 4 per cent. Is that a big problem?
Our roads are congested in urban areas, not so much in semi-urban and rural areas. It is likely that a substantial number of Tata small cars will be sold in areas where the road traffic is not that bad. So, should the village aam aadmi also be denied a cheap personal vehicle?
Even if the Tata small cars create utter traffic chaos in our cities, it may be a blessing in disguise. The transport infrastructure in our cities is pathetic probably because our netas never have to suffer traffic blocks. The big shots, who take all the decisions, have police vehicles clearing the way for them.
The lesser minions, who lobby to influence the decisions, are usually chauffeured around and hence commuting is less tedious for them. So, to take a highly charitable view on our netas, it is possible that they are really not aware of the problems. When we protest loudly, they will agree to 'look into the matter', without really grasping the enormity of the problem and hence cannot be blamed for forgetting the promise.
But, they will grasp the problem better and will be forced to 'look into it' if their cars cannot move. For them to roll down their windows and see reality, the traffic should become so bad that even police vehicles cannot clear the way. Then they will do something about our roads or let the private sector do it.
I am all for mass transport systems - metro rail systems, high capacity buses on dedicated lanes and so on - for our cities. Many commuters would prefer public transport to driving their own cars, provided they are safe, comfortable and reliable. There is no doubt that, in the not too distant future, a majority of city dwellers will switch to public transport from cars. Because it will be impossible to take out the cars daily and our public transport systems would have improved beyond recognition by then.
But, that will be a gradual transition. All we can do is to exert pressure to speed up the process, and that is what all the activists railing against the Tata small car should be doing. Until we have better public transport, commuters would prefer personal transport - if they can afford it - and there will be huge demand for personal vehicles. You cannot fault a business for trying to meet market demand, in a supposedly liberalised economy. If the Tatas had not done it, somebody else would have. Bajaj already has a prototype ready!
All those who are arguing against the Tata small car are barking up the wrong tree!
Friday, November 2, 2007
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