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India-the next Detroit?

Tata_indigoBusiness Week reports that  Tata and Fiat   are planning on building a $2,200 car.  The design is finished but Tata asked Fiat to fine tune the final design.  So why is this important?  Because the greatest growth in auto sales will be in countries that are not driving cars now, they will be moving from motorbikes and such to cars.  Other ventures are planned for a pickup to be exported to developing countries.

Indeed, check out their website, the Tata Indigo is touted as ‘go ahead spoil yourself’  It is a sedan, not a hatchback, a sedan is seen as a sign of economic success!  Conclusion, the fact that there is a market for a ‘sing of success’ speaks legions about progress in India. More globalization on the march.

Meanwhile Hugo Chavez is threatening to nationalize all the television stations and thereby control the media in Venezuela.  Ecuador has been downgraded to CCC on its debt, so a default on its bonds is expected.  Will nationalizing industries help these S American countries compete with India and China?  Hint, did it help Cuba?  And remember Venezuela is propped up soley by oil prices, there really is not manufactured export.  So what if oil prices drop or we finally actually get serious about an energy policy?

DLE

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2 responses to “India-the next Detroit?”

  1. Michelle W. Avatar
    Michelle W.

    Tata needs Fiat to fine tune the final design so that the quality will be durable enough to maintain customer retention. If it is cheap in price and poor in quality, it will not last long in the market. Also, because other auto companies are entering the Indian market (i.e. Hyundai, Honda, Suzuki), Tata Indigo will need sufficient quality, in addition to its inexpensive price, to compete adequately and win a significant market share.
    I’ve also read an article noting that Toyota is expanding in Russia, Brazil, and India. They are predicted to become the #1 auto company globally by, I think, 2010 or 2012. They are heavy competition for other auto companies. Of course, if Tata can at least closely meet the quality of Toyota and sell for a low price, they have potential for growth.
    Nationalizing industries will not help Lt. Am. in global competition. Socialism and communism discourage competition…equally poor or unequally wealthy is the choice.
    I also read an article in BW on the reasons behind fluctuating oil prices. It noted that because there is a certain, or fixed amount of oil availible, any info on factors relating to oil will significantly affect the price. If factors continue, over the course of 20 years for example, to surpress oil prices, Venezuela will have to seek an alternate source of generating external revenue, or overthrow Chavez and resort to a capitalistic society and government…or they can have the US come in there and take over and reorganize the government…sound familiar.:) Of course, this is not out of the question due to Chavez’s indirect alignment with the “axis of evil.”

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  2. Dennis Elam Avatar
    Dennis Elam

    I was not sure exactly what ‘fine tune’ the final design meant, In this case I am not sure it is the quality issue but probably more of a design issue, while FIAT had problems in the US they were due to lack of emission standards, not style of the car. Italians are well known for design, Pininfarina and Bertone have been doing car bodies for decades for the best in the world. After all Chrysler is about to import Chery from China.
    Tata is a huge comglomerate like Yamaha in Japan, they are into just about everything.
    I see in the Friday WSJ that oil output in Mexico has dropped drastically. Mexico has never allowed foreign ownership or participation and used PEMEX as a featherbed employer. Sound like they need help fast. THis is why OPEC called US companies back in 1999, they never were able to maintain production by themselves. And the same will happen in Venezuela, kicking out Western know how will eventually slow oil production, the only source of wealth in the country.
    Good post Michelle!
    DLE

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