Nano: Ratan Tata grows beyond business

What is the impact of a leader’s values on his business decisions? As leaders move up on the value hierarchy, do they start thinking more about society and about making a difference ? This seems to be true going by some of the important decisions made by various leaders.

Everything that we do is to fulfill a need and by doing that, we get satisfaction . Psychologist Abraham Maslow proposed that humans operate as if they have a hierarchy of needs. His research focused on the motivations of people who were successful in their lives. According to Maslow, the primary human need is survival.

When we are able to master survival, we shift the focus of our consciousness to the establishment of relationships , so that we can feel safe and protected. When we are able to master the art of relationship building , we shift the focus of our consciousness to satisfying our self-esteem needs. Once we are able to feel a sense of self-worth , we shift the focus of our consciousness to self-actualisation .

We continuously grow towards a higher stage, and in that highest state, we become a better human being and this process of growth is termed by him as ‘self-actualisation’ . A self-actualised person is set to develop deep social interest and compassion.

I do agree that a Rs 1 lakh car would sell more than a Rs 2 lakh car and the large number of potential customers would add to Tata’s profits. At the same time, I would like to look at the possibility of Ratan Tata operating from a higher level of self-actualisation when it comes to the Nano project.

According to Ratan Tata, “What drove me—a man on a two-wheeler with a child standing in front, his wife sitting behind, add to that the wet roads—was a family in potential danger.” If we connect this to the fact that Ratan Tata declared himself as chief personnel officer, acting as a change agent to facilitate best HR practices in his organisation, possibly we are looking at a shift in focus and values.

“I think that in everybody’s life there are certain moments of satisfaction. You feel that after that has been achieved, it is a nice time to step away or change gears and that’s why I said that in an ideal world this would be a good time to step away.” Do these words reflect his self-actualisation stage according to Maslow’s hierarchy of needs?

Are we saying the decisions of leaders would be influenced by the hierarchy of values that he operates from? Yes, and this seems to be the truth. “I will be thrilled and privileged if the board asks me to continue as non-executive chairman while the role of chief mentor would be going to a smart person,” said Infosys’ Naryana Murthy.

This shows the characteristic values one demonstrates while operating from the self-actualisation layer of the Maslow hierarchy. We also know that Bill Gates said about his intention to handover his responsibility for software strategy immediately and reduce his involvement in the company progressively . Bill Gates also said he would switch his attention to philanthropy—working on global health and education.

Interestingly, the Airtel campaigns over the last three years show a movement towards a higher level of hierarchy. It started with ‘Express yourself’ and then moved on to ‘Connect to your loved ones’ and now has reached a state where the campaign talks about ‘Dissolution of barriers’ .

This need is about giving back, enriching others and championing a greater cause. This relates to the Body Shop website that reminds visitors, “Never doubt that a group of thoughtful, committed citizens can change the world; indeed, that’s the only thing that ever does.”

So, if we can map, understand and predict the values and hierarchy of the leader, we may be able to predict what would influence his/her critical decisions .

Loans for Tata Nano may be riskier for banks

The people’s car from Tata, called Nano has created a new opportunity, which the banks definitely don’t want to miss. However, the customer profile that is expected to go for Nano is mostly middle class and lower middle class, and banks are worried that these segments have a higher risk profile as compared to other car loan borrowers.

Tata Nano is expected to create a huge dent in the two-wheeler segment and many two-wheeler owners have already expressed interest in owning a Nano. They are even willing to defer their decision to buy another or a new vehicle till the car is available in the market. The two-wheeler loan segment has one of the highest default rates among various retail loans and hence carry a higher rate of interest.

At present the car loans in India are available from lenders at interest rates ranging betwen 12-16 percent, while the two-wheeler loan segment have higher interest rates ranging between 18 -22 percent. In addition to the high interest rates, two-wheeler loans have low tenures generally around two years, while car loans are available for around 7 years.

This loan tenure and interest rate scenario of two-wheeler loan segment can come into picture since the entry level model of Nano is expected to cost around 1.25 lakhs. Keeping in mind the income profiles of this segment of borrowers, banks are contemplating on adding a ‘running cost’ component to the loan for Tata Nano. This could effectively increase the loan amount and hence enable banks to offer loans of longer tenure with lower EMI’s, which could be easily afforded by borrowers of this segment.

The resale value of Tata Nano and design defects, which have been a regular feature of Tata’s popular cars like Indica, are also making the banks take a cautious stand on financing Nano. P. Sridhar, Senior VP,IndusInd Bank said, “If there are design defects it will affect the resale value of the car which could drop to just Rs 50,000-60,000.”

Tiny Tata Nano Car, Big Threat

There’s a good reason why chief U.N. climate scientist Rajendra Pachauri, who shared last year’s Nobel Peace Prize with Al Gore, says he’s “having nightmares” about India’s newest automotive innovation. It’s not because the Nano from Tata Motors, which was introduced last week, makes the boxiest hatchbacks from the ’70s look sexy. It’s not because the car lacks air conditioning in a country where the heat can be paralyzing, nor because its 2-cylinder engine can barely manage 60 mph. It’s because the vehicle’s tiny price tag — about $2,500 — will make car ownership possible for millions of Indians, which could well render the rest of the world’s efforts to combat global warming moot.

Currently, only about 12 in 1,000 Indians have a car, according to the United Nations. In the United States, the ratio is 765 cars for every 1,000 people. What happens if, through a combination of its incredibly rapid economic growth and innovations like the Nano, India’s car-ownership ratio hits that of the U.S.? That would put 864 million cars on India’s roads, more than 3 1/2 times the number in the U.S. It wouldn’t happen for several decades, if ever, but the same phenomenon is occurring in China, which has an even bigger population. The International Energy Agency estimates that the number of cars in China will increase sevenfold, to 270 million, by 2030.That’s a scary prospect. Light-duty vehicles account for about 10% of global carbon emissions, and that number is going to rise quickly as more Indians and Chinese get behind the wheel.

Indians, of course, have every right to enjoy the newfound freedom and status that comes with owning a car. There is nothing the world’s environmental community can or should do to interfere with the rollout of the Nano. Yet it does point up the urgency of developing technological alternatives to the internal combustion engine and the burning of fossil fuels.

If there’s a silver lining in the Nano cloud, it’s that the free market could help solve the emissions problem. Prices for gasoline will probably keep rising as millions of cheap cars hit Asian roads. That will spur research into alternatives and discourage people worldwide from buying low-mileage cars. It’s even possible that gas prices in India might rise to the point that those who could afford a Nano wouldn’t be able to afford the gas to fuel it.

American automakers should take heed. Judging from the models being unveiled at this week’s Detroit Auto Show, consumers can expect more of the same gas-guzzling vehicles in showrooms this year and next. Detroit isn’t entirely to blame because it takes years to produce new models, and soaring gas prices are a relatively recent phenomenon. But carmakers considering their future lineups would do well to phase out the Navigators for something more Nano-sized.

Nano as taxi? Mumbai drivers all geared up

Think Mumbai, think black and yellow Fiat taxis. For decades now, the trusted Fiat has helped Mumbai get around be it day or night, with the friendly taximan always just a wave away.

But the cabbies now want a change for the better. With the Premier Padminis no longer being manufactured, they are looking forward to the Tata Nano hitting the roads.

“Majority of them (drivers) are anxious and have enquired about this vehicle because there’s no other viable option,” says President, Mumbai Taximen Union, A L Quadrose.

The drivers are more than happy. “It’s cheap, it looks good. Who wouldn’t want it?” says a driver N P Singh

But the Nano may not be viable just as it is. The taximen want few changes for it to become their ideal run-about.

“Petrol is not viable for us. We have to be able to convert it to CNG. We’re trying to work it out,” says Quadrose.

Drivers too have their set of demands. Says a taxi driver Rajendra Kumar Tiwari, “We need a carrier and more space. Then it will be great.”

But even with those modifications, there are doubts being raised.

“It (Nano) can only work for very short distances. if I want to go from city to suburbs and back it will not work. They need a sturdy car,” says Chairman, Western India Automobile Association, Nitin Dossa.

The Taximen Union says it’s meeting Tata later this month to figure how the Nano can be a viable alternative for the Premier Padmini.

Is the two wheeler segment dreading the Nano effect?

Tata Motors has challenged global auto firms and kept Chairman Ratan Tata’s pledge to introduce the Nano at the emotional price of Rs 1 lakh.

For the first time in history of automobile, the need for smaller cars would soon overtake the need for horsepower or speed as oil hovers around $100 a barrel. Major auto firms and even bike-maker Bajaj had a small car on display at the Auto Expo that is underway in Delhi. Most of them were concepts to counter Tata’s Nano. But the underlying theme was obvious, ’small’.

The question is will Nano spark a car revolution on the streets that would have an impact on the two-wheeler segment. Nano is far safer than two-wheelers where the fatality rate is double that of cars. Analysts say that even if Nano manages to convert 10% of the two wheeler market of nine million, it will have almost 50% share of the car market.

Nano is expected to be launched around Diwali and may lead to a 20 per cent reduction in prices of two-wheelers and a 35 per cent decline in prices of second-hand cars, according to industry chamber Assocham.

“Nano is expected to change the automobile market in India. It would cater to a typical middle income Indian family of four who wants to avoid rain, wind and dust. Its freedom for four,” says Dilip Chenoy of the Society of India Automobile Manufacturers (SIAM).

The 100-125 cc two-wheeler range, which comprises 90% of the two-wheeler market in terms of sales, could be severely affected with the launch of Nano. Bike makers Hero Honda and Bajaj have realised this and have jumped into the bandwagon of ultra small cars.

Rajesh an IT professional working with an MNC in Gurgaon who, travels every day in a Bajaj Pulsar says, “I would definitely consider buying the Nano as the cost of the car fits my pocket and above all it gives good mileage.”

Industry research organisation CRISIL, in a report, stated that the Nano may bring 65 per cent more families into the range of those who can now afford a car. “The on-road price for a Nano is expected to be in the region of Rs 1.3 lakh. This brings down the cost of ownership of an entry level car in India by 30 per cent, making a new car affordable to families with income level of Rs 2 lakh,” the Crisil research added.

However, Aman Verma a manager working with a Hero Honda showroom in East Delhi had a different opinion, “Nano may give a lot of people a chance to own a car, but more than fixed price, it’s the variable cost of maintenance, fuel and spare parts, where the two wheeler sector has an edge.”

“A car is much more suitable, safer and a comfortable option than a two wheeler, in a cost conscious nation like India, but there will always be a place for a two-wheeler. There will not be a large scale migration to the Nano. Both the bike and the entry level car segment would have its own niche customers in future. In the next five years the two wheeler segment would constitute 25% sales of the auto industry,” adds Chenoy.

Mahesh Kumar working as a Sales Manager for a Tata Motors showroom in Delhi said, “We are getting 50-60 telephone calls daily from people enquiring when exactly the Nano will be available in the market.”

A nation with economic growth touching 9% consecutively for the third year and a population of more than a billion, there is no scepticism that demand will be strong for Tata’s Nano, whose basic model does not include air conditioning and lacks a radio. This is a win-win situation for the company as it would play the volumes game to make profits from its dream project.

The Nano would cost roughly less than half its nearest competitor the Maruti 800 and just about double than that of a 150 cc bike. Two-wheeler manufacturers would now be forced to work on new technologies to make better motorbikes and scooters. This would also in turn influence the price tag of the two-wheelers. It also proves that for frugal engineering, at least Indian manufacturers can outdo anyone else in the world.

“A promise is a promise,” said Ratan Tata after displaying his dream project at the Auto Expo. One American journalist wrote that the Nano is Wal-Mart on wheels. Well, will this prod the two wheeler industry in India to focus on an entry level bike that would cost Rs 10,000?

Tata Nano Launch – World’s Cheapest Car

 

The global auto industry is dynamically establishing a niche as major economic engines. Millions of aspiring Indians and the international auto markets watched in awe, the launch of world’s cheapest car – Tata Nano.

Tata Nano, launched by the $29-billion Tata group, is a believed to be a people’s car. The car was launched in an auto expo held at Delhi on 10 Jan 2008. Ratan Tata is a 70-year-old kind and tender chairman of the Tata group, drove this world’s cheapest car to the Tata Motors pavilion and unveiled this new car, giving sleepless nights to rival companies.

According to Tata group, the car will come out on Indian roads in the later part of this year. The price of this car is a cause of astonishment and fear for all the other auto companies who are now trying to reduce their market prices as to compete with the launch of Tata Nano. The price of Tata’s car is about Rs 1 Lakh ($2500).

Expertise in auto industry are raising doubts to the price, specifications, features and safety of this cheap car but Tata promises the safety and emission standards. The car had passed the Indian regulatory requirements, frontal crash test and the Euro-IV emission norms. It is also tested for front, rear and side collisions.

This car is especially manufactured for the middle class population of India who desire to have a safer means of transport at an affordable cost. It is a four-door car with length of 3. 1 meters, height of 1.6 meters and width of 1.5 meters. It can accommodate up to five people, a complete family.

The car beholds an efficient engine of 623 cc with an efficiency of about 20 kms per litre of petrol. The highest speed is stated to be about 105 kms. The only missing luxuries are air conditioner, car audio systems , power windows and motorized steering. But the targeted customers are not so much concern with the luxuries as they are with comfort and safety. For upper class population, Nano has also come up with the deluxe model attributed with air conditioner.

After the commercial launch of Nano, the Indian roads especially metropolitan cities like Delhi, Mumbai, Chennai and Bangalore are expected to be flooded with Nano. A city like Mumbai that has always experienced heavy floods during monsoons will now experience a flood of Tata Nano. The cheap price will definitely replace the used cars Mumbai . Used cars are just a pure consumption of goods for the middle class population. Now, with the introduction of Nano, the demand for used cars will certainly reduce.

Mumbai being a corporate hub for many international companies, there is a huge demand for car rentals. With an economical price of Tata Nano, it is expected to take over the industry of car rental Mumbai .

Launch of Tata Nano is not only the pride of Tata group but also for the whole of India. This is because this launch reflects technological and entrepreneurial ability of our country.

Mass appeal: ‘We want Nano’

“Can you tell me where I can make booking for Nano car?” a lady was asking at the Tata pavilion at the Auto Expo where the company is showcasing its Rs 1 lakh car. While initial impact is huge, dealers are flooded with calls from people on queries on the car and when bookings are possible.

Though Nano, unveiled on Thursday by Tata group Chairman Ratan Tata, is yet to prove its road worthiness, will make a big impact, say dealers of Tata Motors, adding people are showing very high level of interests Premanand Shenoy, who has two outlets of Tata Motors’ in Bangalore, said as many as 400-500 queries came to him since Nano’s unveiling, with many people are already coming to buy the car. “And, the total number of inquiries are actually much more as many people do not identify themselves but just make queries,” he said.

Shenoy said many queries were being made about the car. “Many people want to know about the on-road price and also how much the deluxe version, with AC, would cost,” he said.

Shenoy said some others wanted to know whether power-steering was available, how much is the boot space and whether a stereo could be fitted. “Interestingly, a majority of queries we got were from working women. And apart from the general public, there were also queries from college students,” he said.

Roop Madan of Sanya Motors, who has Tata outlets in Delhi, said “hundreds of queries” have came on Nano. “Many people are asking how is the car better than Maruti 800. Also, people want to know how safe is the car and are also asking about its running cost and on-road pricing,” he said.

Binod Aggarwal, who has three Tata car outlets in Kolkata, said they were receiving queries even from villages. “We are getting calls from villages and even our associates who have dealerships there are seeing a good level of interest about Nano,” Aggarwal said.

He said many people wanted to know, or rather see the interior space. “People are asking whether it is available in diesel and what mileage and top speed the vehicle has,” Aggarwal said.

Tata Motors MD Ravi Kant said the company would be beefing up its dealership network before rollout of the car, expected to be later this year. “It is not only meant for use in the city but also in semi-urban areas. You got to have the reach there and also ensure that service, spares and vehicle financing reach there,” he said.

Chandravadan Bhandari, who has four outlets for Tata Motors at Pune, said many prospective customers said they wanted the car as its small size made it more efficient to drive in crowded metros. Also, he said there is a “near race” between people to be the first one to buy the car. “I have received many requests from friends who said they would like to be the first customer of the Nano,” he said.

src: Here