Financial Daily from THE HINDU group of publications
Friday, Dec 09, 2005
Financial Daily from THE HINDU group of publications Friday, Dec 09, 2005 |
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Corporate
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Outlook Middle class will drive the small car market: Ratan Tata Our Bureau
Kochi , Dec. 8 BILLED as the Rs 1-lakh car for the Indian masses, the Tata group sees huge potential for its small car venture. Talking about the project's relevance to India's rapidly growing middle class, Mr Ratan Tata told McKinsey Quarterly in an interview: "If you could position an all-weather car that was not a glorified scooter or a stripped down car, then I believe there would be a market potential for one million cars a year." In a departure from traditionwith regard to automobile dealership and marketing, the company plans small satellite units, with low breakeven points, where some cars could be assembled, sold and serviced. Touching on the social dimension of the project, Mr Tata said the company would encourage local entrepreneurs to invest in these units and train them to assemble the fully knocked down or semi-knocked down components sent to them; this would also do away with the dealer and dealer's margin. The assembly-cum-retail operation would be combined with low-cost service. Cutting down on cost, the Tata's small car project would focus on large volumes, using more plastics for the body, replacing welding technology with modern-day adhesives and low-cost assembly. At the centre of the project would be a large volume unit for the manufacture of all high-volume parts.
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