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Thursday, January 5, 2012

Cars and All Those Things...

The Auto Show in Delhi shows that automobile manufacturer's are finally going with their gut.For many decades India had either very big,flashy and expensive cars or tiny tinboxes that did service on the roads.The need for an SUV or crossover that was affordable,drivable on India's mad roads and scrambled parking and did not cost a bomb...was simply a dream.

2012 is changing that with Renault,Ford,Ssangyong etc bringing in smaller city based SUV,RUVs and hopefully buyers would be spoilt for choice soon.It underlines a distinct maturity in the economic sense with more clients leaving the 'low cost'model and having higher aspirational values and more disposable incomes.


I am shocked to see the number of Audis,BMWs on Kolkata roads as its never been a city that believed in 'flash'.A lot of it is due to the lease method used by these companies to hire their cars rather than sell them outright,but it does underline a major change in tastes or is it the demoghraphic change in age and aspiration?

Despite the looming slowdown in growth I believe Tatamotors and M&M are poised to grow fast as they have the niche products to sell in Indo-China where most of the demand is coming from.

The Fords,Chryslers,GMs got taken out by the Japanese when the shift to small car segment happened in the late 80s and now I believe these US companies have dumped their gas guzzling SUVs and taken to the lower end they have made another mistake.The brand built by Jaguar,Landrover has been revived in Asia by Tata motors and that has been a master stroke.

The shift to high cost and a higher margin product will make a difference to the annual Balance Sheet next year as demand has not shown a major negative blip yet.Honda toward has declared a price war and when these Japanese get something in their craw they keep at it till the end so would be interesting to see how Hero Motors reacts to their former business partner in India...