Monday, March 30, 2009

TV Industry Post Akai and Cars after Nano,

Will Nano redefine cars???

I have missed out posting during the launch of Nano , because of my traveling. But then maybe this is the right time to reflect back on the impact Nano would have on the car industry as a whole, more so in the context of the crisis that auto industry is currently undergoing. I had written earlier on how competing car manufacturers moved from denial to reactive stage in the days before the car was unveiled in the Auto Expo. This in a sense a continuation of that thought stream.

I was reflecting back on how Akai TV changed the landscape of TV industry in the late 90s when it came up with it's low-priced color TVs (in combination with a sleeve of exchange schemes). For the benefit of readers who were too young to remember the launch of Akai I will give a brief recap. Before they came, prices of color TVs use to be out of reach of most of the middle class households, at that time it use to priced around Rs 20000/- for a standard 21' TV. And I would say most of the players in the industry were happy with the situation, as it made it a premium product and they had a lot of cushion in terms of margins, but then when Akai came in it forced everyone to rethink the pricing and that comfortable cushion was removed and everyone had to start thinking afresh, from moving away from the vertical integrated model of manufacturing TVs to the procurement based model.

I foresee a similar impact of Nano on the car industry and this time the impact would not be limited to Indian industry, but the whole world itself as Nano would be launched in Europe by 2011. They would be forced to question the basic assumptions on which the industry has been operating till now and reinvent the way they have doing the business till now, and the consumer would get benefited because of all this ...

Wednesday, March 18, 2009

Economy Slowdown Vs Sucess Stories

Everywhere what one listens to is the stories of the negative impacts of the slowdown, lowered growth projections for the Indian economy, the details of how many companies have put their expansion plans on the back burner and so on....

But then there are some examples of how companies are also managing to fight the slowdown and continue to grow. I thought it would be worthwhile to document these stories too,

First is the story of how Big Bazaar has managed to grow in a market where most of the other players are facing the heat of the slowdown. It is the only retailer which has managed to grow at 25% in India. This continued growth has been attributed to the instincts of Mr Biyani , and his ability to keep himself close to the ground realities. I had an opportunity to listen to him at one of the convocation addresses which he had given, there too his message to the students was that in the real world one has to be very quick to sense, learn and respond to challenges thrown up by a rapidly changing market. He has shown that he practices which he preaches...

The second case is that of Hero Honda , it has recently posted it's best ever performance in its 25-year history. The reasons are a combination of their strategy of sticking to the 100 cc segment while rivals focused on the 100cc plus category and the attention to rural and semi-urban markets, which have not witnessed slowdown as others. For more on the story, link.

And the imminent launch of Nano in the market should also help cheer up the consumers...

Tuesday, March 10, 2009

Tata Magic - Rural Transport Vehicle

Was travelling for the last week so could not update much. Will share some of my travel insights..

I noticed the presence of Tata Magic across the roads in UP, Delhi and Haryana. The vehicle is being marketed as a rural transport vehicle. With a 700 cc engine and a van like design it seems ideal for the passenger tranportation needs in rural India. The vehicle is designed to take 7 passengers, and one who has seen how many more are squezzed knows that the maximum number of people is best left to the imgination of the driver. It seems that Tata would end up using the chassis of its existing Ace ( a huge success) and thus able to optimise on the costs.

Though Tata Magic is not the first to enter this segment, some year back Hindustan Motors came up with a rural transport vehicle called RTV, but it did not succeed much.Today one can seen some of them plying as school vans. But my feeling is that Tata Motors has again hit the right spot in the market going by the number of Magics I have seen on the highways in the country. Obviously the price of around 2.5 lakhs worked in its favor, but will magic follow the footsteps of Ace?

For more details on Magic visit Tata Magic

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