11th January, 08 was a day I felt very happy. TATA - an Indian conglomerate which also make cars - launched the cheepest car in the world named Nano. It is as costly as the DVD player of Lexus.
As I see India, it can be broadly divided into three class of people: rich, middle class and poor.It is the middle class where the line of divide is growing weaker as more and more people are jumping into the rich bracket, which is again forcing rich to become super rich.
India has a lot of disparities which is also growing at a very fast rate. One can see the glitz of the Hilton and the Taj's and yet on the roadside you would see people begging for alms. So there I was on the eve of New Year standing in a queue outside Rock Bottom - a popular disc in bombay. I shelled out some 2500INR ~ 75USD to stand in a queue which was half a km long and it gave me a feeling that I was not privilidged enough. Even after spending this much of money I was sweating in the heat outside. As I was swelting the heat I saw these poor people - mothers with small kids in their laps begging for money .5 INR or 1INR or 5INR(if they are lucky), small kids with no clothes on wondering why their is a queue outside this place. It is not a temple and there is no Ganesh Pooja going on. Such is the disparity, where at the same place I am shelling out 2.5 grands for 4 hrs to enjoy the best music, wine and cuisine, there were people begging for a rupee or two.
Let us take a look at the growing middle class in India. I can safely divide the middle class into upper middle class and lower middle class. IT has brought a revolution in India and today we can see more and more people earning salaries which their previous generation might not have imagined in their entire tenure. This upper middle class which has its root in the IT is fast spreading them in the not so forbidden category now - the rich class. The class of people which remains untouched by this IT revolution remains the lower middle class. Obviosuly their is more to it than written.
It is the growing divide between the upper and lower middle class that is a cause of concern for India today and I am confident that Nano is there to bridge it. Let's contemplate how.
There are three types of customers for Nano:
1. Rich who wants to buy it for the sake of fun
2. Upper middle class; where college going kids, housewives might buy as an extra option
3. The lower middle class which until now was thriving on scooters or motorcycles.
It is the 3rd type of customers that interests me. Millions of people in India belong to the scooter clan which is pictured as this in the words of the man himself who made it possible - Ratan Tata, "I observe families riding on two wheelers - the father driving, his kid standing in front, his wife seated behind him holding a baby" Owning a car is still a distant dream for them. Imagine when these set of people think of buying a car that is just double the price of the scooter that they buy, gives them the comfort of 4 wheeler, a brand called TATA and a bloated social self esteem of having a car what will happen. In my thinking India will prosper as Nano will try to bridge the growing disparity between the upper and the lower middle class. For the poor class, I still don't see an option as they lack even the basic necessities but that is a separate issue altogether.
3 comments:
indeed nano will change the outlook of india again by a huge margin as did the maruti 800 two decades back.
but what will be the impact of this car on a huge two-wheeler automobile industry ?
its effect on already clogged up bombay traffic ?
the economic bands are a sad truth of almost all the nations.You can find beggars in US/Europe/UK too.
Richest man on earth top 10 loist consist of 4 indians. and still 23% of all indians live below the poverty line.
People buy back the tipu sultan sword for 1 cr. still kids are looking for donors for their 3000/- annual schooling fees.
Harsh Realities??
Sad but true.....
Let's tackle the harsh realities one by one. Every problem has a solution.
1. Impact of this car on the automobile sector:
a) People who'll buy Nano for utility purpose will not go for a scooter / bike.
b) There will always be a niche market for bike enthusiasts
c) Bajaj and Hero Honda are already geared up to move into the 3000$ car launch.
2.Disparities between rich and the poor:
a) Nano might bring about a cultural change in India. A car savvy person is likely to showcase an improved lifestyle. You tend to buy better clothes, better shoes, you go to a better barber shop. A family who buys Nano as utility is likely to exhibit better opportunities to afford a changed lifestyle.
3. Traffic, pollution, parking, petrol price hike, increase in crude oil imports:
a) Increase the rate of parking to say a Rs10/hr. Simultaneously increase the public transport system. Levy heavy congestion charges in cities like Bombay and Bangalore
b) Nano meets euro IV std and I believe it'll not be because of the tiny car but because of the trucks, buses, auto rickshaws, scooters, cars that've expired that age. They need to be attacked.
c) Increased crude oil import, price hike etc is a thing that is bound to happen. It's a bigger problem that needs to be looked in entirety.
None of the reasons above though provides a logic for not to launch such a product in the market, and at the same time withheld the right of people to such a product.
Let us all hope that Nano meets all of our hopes and it brings the next revolution in Indian automobile industry.
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