The author seems to think cost should be same no matter the time lines, which is not possible in any stage in life. you cant be young forever even you age. Sanjays Maruti800 started with the aim of providing car at 1lakh. But the value of 1 lakh in 1980 and now, is not the same. Show me how many in 1980 can spend 1lakh for a car. Now for a lakh of rupees you cant get even your child enrolled in good school.
So value of the rupee(currency) changes over a period of time. So if the input costs go up so the cost of nano or any thing for that matter. People are also aware of this so the reason you see initial booking mania.
I want to know when can tata see breakeven for nano, selling 5million units? Not sure if it makes biz sense
whatever is the message author wants to give in this article. but i liked the marketing stretagy to introduce a new product in the market backed by R & D in its pre launch time. you can create the market more easily by this. second question is to put price the similat over the time? the answer is that the product should be seen as economical at any point of time. it should not be related to figure only. Economy is onr thing which is going to remain dynamic. author has clearly mentioned this even at Rs. 2000, ginger is value for money. this is what most important for a buyer's decision.
Govindraj no doubt like many others is a skeptic. Before the launch they all said that it was not possible to manufacture a car for a lakh. Tata and his team proved them wrong. He showed that Indians can also innovate. Govindraj gives the example of the Ginger chain where the rates increased from Rs. 900 in late 2004 to Rs. 1999 in 2008. My simple question to him is did his salary remain constant during this period? Did the prices of all items not increase? Why should the rates of the Ginger chain only remain constant? Let us give credit where it is due.
RE:Tata has proved the skeptics wrong.
by Pavan C. Joshi on Jan 23, 2008 12:07 AM
You are talking about a true blue market economy where competition defines market dynamics. This is true of India in selec verticals ... matchboxes, bidis (not cigarettes), no ... not even bicyles.
There is co-optetion in the market. Co.'s operate like co-operative cartels. Specially, inthe more sophisticated, or enginering and services industries. Co.'s like hotels that cater to overseas people are totally abusive re: cartelisation. Try to get a room in a 5-star hotel in India, it's a game ... and they play you ... er, us!
China, now ther you have competition. 100's of motorcylce, auto and aircraft Co.'s. Small 'low volume' players, mass market players, and elite players. Then you have the sub's and the system integrators. China has a more vibrant and throbbing industrial economy today, in flux, dynamic .. in motion ... than EU or US. Maybe not so good idea re: waste ... but choice, too mch.
tata 1 lakh car is an undoubtedly a great endeavor by the group but the thing is that can it sustain its low cost on road as well.... with rising prices and inflation rate, the manufacturing cost of the car is definitely going to zoom up and no business is run for loss... moreover the company may even try to recover the cost of the vehicle by it after sales services costing very high... lets hope that nano does not burn a macro hole in our pockets.....
Ratan Tata said that he is offering the Nano "basic" model at a dealer price of Rs.1 lakh (customer price may work out to about Rs.1.35 lakhs) "because it is a promise".
This implies that even when the product is launched commercially, the price of Rs.1 lakh is not giving a profit to Tatas or perhaps not even meeting the cost of production.
There are also clear indications that Tatas will launch a few variants of Nano at a higher price with added features. These variants and may be volumes generated by eventual exports to countries in South America and Africa may be encouraging Tatas to hold the promised price of Rs.1 lakh for reasonably long time (say 3- 5 years).
a bare bones hotel like ginger which costs 2999 rupees per night for a double room is by no way cheap.its still a rip off. in U.K ,budget hotels like formula one , travellodge give away decent rooms for 20 pounds which is roughly 1600 rs. even posh holiday inn rooms are availble for 50 pounds.( rs 4000 ), ibis hotel costs 45 pounds . in europe its even more cheaper( companile around 45 euros, ibis 50 euros etc). rates in india seem exhorbitant in comparison.and salaries of people in india are much lower too.
RE:cheap hotel ?
by strite on Jan 23, 2008 03:29 PM
yes it is more of buying power. Any middle income guy in UK earns 150-250 per week plus has some tax benefits for housing etc. So he can afford to stay in budget hotel of 40GBP atleast for a week.
If you apply the same thing for avg indian earns about 8k a month so he cant think of staying in ginger for even a day. No matter what the state of the economy, indian salaries cant ever match the buying power in UK/Europe, except housing.
RE:cheap hotel ?
by Rediff on Jan 22, 2008 03:45 PM
Ok. So you suggest that if someone want to stay in a hotel for 1 day he should first travel to UK and stay in a 20 pound hotel... not a bad idea
YES, Tata can promise the price of Rs.1 lakh for the next 50 years provided: 1. the employees work on the same salary of 2007 2. the power charges, taxes, remaint the same as of 2007 3. the raw materials suppliers supply the materials at the same price as of 2007 4. whoever is connected with the Tata 1 lakh car assures uninterrepted service/supply at the same price as of 2007
RE:Ginger is Gateway in new Avtaar
by Chanakya on Jan 22, 2008 11:47 AM
mohd - thanks for copying as it is from an earlier post. you could have also added as something as your own..
i really don't believe in the reasoning that only competitors who can offer a nano like car at that price will keep the price of current nano at current levels even way into the future.
regardless of the existence of competitors, if tata motors is making reasonable profits out of nano to keep them going, then they should continue to offer nano at current prices in the future as well..given that all other costs remain same or near the current rates..such as raw material, labor, workmanship costs, R&D costs, operations/ engineering/ production/ distribution/ selling costs...and what not? Unless these costs go up..i don't see why nano shouldn't cost the same as now into the future as well..
Tatas need not sell THE CAR for 1 lac for N number of years!There is a fact that the Tatas'efforts and Researches have revalutionised the "car making" concepts and the industry!Tatas efforts have triggered ideas in other auto companies like Bajaj and Mahindra!
What was the cost of a Bajaj/Hero Honda Bike before 10 years??10 years it has increased around 25%! I bought a Baraja Champion for 40k in 1997!Mr.Govindraj's points are valid. The market will decide the price! Tata can increase the price as per their production costs, inflation etc.! But still the price will be very attractive and affordable to the middle class! I think the govt.should give some kind of tax exceptions for the CAR!
