Capturing a very special moment - the state of Nirvana

This is a very special post, to capture a very special moment that has eclipsed everything else over the last 3 days. I will struggle with words for most part of this post, ‘coz I am currently in a state of Nirvana, a high resulting not from 5 bottoms-up of neat Scotch Whiskey on the rocks, but a high resulting from realization of a long cherished dream come true. It might sound like I am going a bit overboard with this, but it wouldn’t have been a special post otherwise, right?
This Thursday, I got my car! … lemme give a short preview to the events and emotions starting from just before Thursday evening to the time when I started typing this post.

Jan 2007, first serious thought about car ---> Applied for Basic Theory Test to convert my India license to a valid Singapore one ---> Started with understanding various different cars, a trip to showroom almost every weekend to understand the specifications, price, design, etc ---> booked 17th March as test date for driving test ---> 16th evening, got a Singapore traffic book to ghot ---> went for a movie on 16th evening, came back at ~2am and then realized “ohh. crap, haven’t ghoted for the test” ---> ghoted the driving rule book from 2am to 5am on 17th early morning ---> went and gave the test, lady luck helped me pass the test and after ~2 hours of patience in the queue, got my license to drive!

Without even thinking of breakfast or lunch, I directly went to the car dealer, told them, “look, I am legally permitted drive now, so better let me take a test drive”! ---> went to different showrooms – Chevrolet, Subaru, Hyundai, Honda, Nissan, Toyota to check out all possible cars that could fit my extended-extended budget! ---> gave a very deep thought to what I really wanted vs. the risk of taking a huge loan ---> developed an excel model to see if there were any remote cost savings that I could do to fit the monthly installment of car in ---> alas, it made no financial sense to buy a car here in Singapore à so, Mr. Logic said, “don’t be stupid, there is no real need to buy a car, it makes zuk financial sense” ---> then Mr. Unknown told “stop living life so defensively, stop being calculative with things that matter to you most, try being fearless for once, stop relying on logic for every damn decision!” ---> and so… decision was made, Mr. Logic was asked to take a chill pill!

So, after one final round of test drives on 1st April, made up my mind to go for Hyundai Avante ---> surprisingly, it was not even in my initial short-list, ‘coz I wanted a manual transmission only, while Avante came with automatic version only ---> deep thought again, decided to let-go the stigma attached with manual transmission to appreciate the other good things with Avante à booked the car over lunch on Monday, 2nd April

I was reasonably happy with the decision, though felt nothing special as such à work kept me busy for the next one week ---> on 11th April, got a message from the dealer – “your car has been registered and will be delivered this week” ---> I called back immediately, said “please please, asap!” ---> the plead was responded to and I was informed that I could collect it on Thursday evening (12th April) ---> Since then, I have been in a different world! ---> Mr. Logic probably gave up and disappeared and Mr. Unknown has been governing all my actions since then ---> didn’t sleep much on Wednesday night, out of sheer excitement and expectation of a special day ahead ---> next morning, went to work à everyone was like “can you please stop smiling for no reason?” ---> did a bit of work, with half my mind in the fast approaching dream world ---> finished the work and left office early at 7pm ---> rushed to the showroom ---> signed the documents, saw if the relevant papers were intact, and this was it ---> was handed over the key and …

Wasn’t entirely sure of the way back home from the showroom ---> a very tentative drive back home ---> takes a bit of time to adjust to a different car, so patiently drove back home ---> a quick couple of calls back home, started off within 10 minutes to see my cousin ---> lost my way, took the wrong route, but “so wat, I was enjoying it”! ---> drove and drove from 8pm to about 2:30 am, ofcourse with stops in between for a Birthday party and some late night Mc Donald’s visit ---> special thanks to special friends (Candy, Bharti, Bulco, Abhishek) for making the evening special ---> back home at 3am, had clocked ~150 kms by then!

Since then, a few more drives all across Singapore ---> have done 400 kms already! ---> many of these drives were purely “aimless” ---> take any damn expressway, keep driving, will reach somewhere at some stage, take a U-turn back and drive and drive ---> get lost somewhere in between à but I have enjoyed it all ---> I delayed the decision to purchase a road map and since then haven’t looked at the map, ‘coz I am enjoying these “aimless drives with no real motive or destination” ---> Maslow would have seen me drive before he came up with the term “self-actualization”!

Today, Sunday morning, got up à went for breakfast, something that I haven’t done in years, just to drive! ---> came back, did the first car wash here, spent a bit of time near the engine, but frankly, with all technology coming in, I couldn’t understand much

So, this is how it has been ---> frankly, I am in a totally different world at the moment ---> have dreamt of having a car for way too long (~2 decades now probably!) ---> and it is slowly sinking in ---> not sure, if any one else can appreciate it, probably Maharaj who is himself a bit crazy about driving would get somewhere close to appreciating my state of mind at the moment! ---> for others, I continue to a topic of intense research over the last 3 days “… he was okay till sometime back, currently looks like a case of acute mental instability, lets pray he recovers and stops smiling… ” and from my point of view, this is Nirvana!

PS: This post was purely to capture this moment. I will get back to my logical ways soon, hopefully before tomorrow morning; otherwise my boss will give me a tough time!! My next post will be a driving review on Avante. In short, I currently term Avante as “Raw power fused with dazzling curves and calm refinement”

A bit of rubbish...

This is going to be a slightly different post - I am a bit annoyed with the way we all have reacted to World Cup debacle...

I am just as much disappointed with India's early exit from World Cup... to the extent that I haven't seen a match since India lost to Sri Lanka. But nothing on earth, warrants this sort of reaction from the media, public, etc

Anyways, that is history now - the events that have since then transpired have showed one simple thing - as a nation, we are highly emotional - we tend to live on extremes - worship Tendulkar one day and then show utter disregard the very next, now that we are out of the cup.

Probably, we all need to put things in perspective. Are we over-reacting? More importantly, is over-reacting to the situation and dumping the entire team likely to improve the performance of the team? My answer is a crystal clear no to the above. Yes, there is need for young blood in our team, but not at the cost of Tendulkar and co.

That is anyways a lesser point - I seriously don't mind that much when critics take a dig at Tendulkar's recent performance - it has been ordinary by his standards. But, to go one step deeper and question Tendulkar's attitude, motivation and commitment to the game is something unacceptable. We all have observed Tendulkar for 17 years to know what the truth is. Our ex-coach got this part totally wrong. I am still giving Mr Chappell some sorta benefit of doubt, terming his out-burst against Tendulkar as an 'error in judgment' as opposed to something 'intentional'.

May be, just may be, the onus is on us, to support the team and ask ourselves "What can be our role here?" Can we look beyond criticizing players and being a threat to the safety of their families?

My experiments with stress management

This is going to be a bit of a heavy post, I will get back to my ‘chill blogging resolution’ soon. A post on stress management has been in the pipeline for long – has been a topic of interest and research since school days and more so in the last couple of years.

However, over the years, there have been a few changes to my attitude, understanding and approach to stress management. Often as it turns out to be, going through a rough phase can help us discover new things and this is what exactly happened with me. It is so much like Test match cricket, you go through a rough phase, you then improve your technique, temperament and attitude to the game. For me, in some ways, it has been a journey of extremes – from a point when I thought, stress meant nothing, driven by some sorta arrogant belief that one can take tons of stress (I can handle it all!) if one has the ability to chill out – to the other extreme when I finally understood that stress needs to be managed on a regular basis and there is more to it than just trying to be chill.

Since then, it has been a process of gradual reconstruction, driven by the intent to discover what I termed as AM_v2 (much like how Indica transformed as a car after initial quality issues!) – there is always that scope for improvement, but I have learnt a bit about stress management and this post is an attempt to put it all together.

Rest of this post is going to be more in graphical format to communicate the complex message better:

We all deal with stress differently. Please do get back to me with your comments if you think differently about stress management.

Of rusticity and vibes!

I am currently at the half way point of the long Chinese new-year weekend. After an unsuccessful attempt at an unplanned road trip to East-coast Malaysia, I am back to my default state of doing nothing, also termed as guss in certain rustic parts of North-Western India! Having mastered the art of ‘doing nothing’, I thought, well, doing something constructive might not be that bad an idea. This in turn led me to spending a fair bit of weekend time thinking of possible serious blogging topics ranging right from motivation to driving to world cup to India’s growth story to stress management to wikipedia vs. unclycopedia, etc, etc. In the next few months, I will pitch in with my 2 cents on these topics, but for now, I am in ‘maxo arbit’ mood to even think of anything remotely serious! So, without further ado, let me jump into the most arbit post published on this blog since the previous posting!

Before moving on, a huge disclaimer: The following post, might make some (non)-sense to my wingies, but others please consult your psychiatrist before reading any further!

Nene/Ajay provided the initial momentum to this random post. Hence any frustration and disgust resulting out of this post can be directly communicated to Nene!

The following statements need no introduction, so...

Inspirational Quotes

• Give me a rustic to vibe and I will move the earth
• Give me vibes, I will give you rusticity
• Whatever the rustic can conceive and believe, the viber can achieve
• A journey of thousand miles begins with a single vibe
• After all, a rustic is a social viber
• All that vibes is not rustic
• Not everything than can be vibed vibes, not everything that vibes can be vibed
• I was born a rustic, education vibed me!
• Vibes is mightier than rusticity

Murphy’s Law

• If rusticity can vibe, it will

Laws of Physics

• An object in rusticity will remain in rusticity unless acted upon by an external vibe
• The rate of change of rusticity of a body is proportional to the resultant vibes acting on it
• For every vibe, there is an equal and opposite rusticity
• Vibes can neither be created, no be destroyed, it can only be transferred from one rustic to the other
• If two rustics are in vibed-up equilibrium with a third, then they are vibed-up with each other
• In any vibe, total rusticity of universe remains constant
• The rusticity of the universe increases with every spontaneous vibe

Okay, even I am tired of these vibes! Too rustic, I think

Freeriders with a pinch of professionalism!

This post is a result of a news article that was recently published in The Economic Times instigating an instant spam on freeriders mail list.
Link to the article:
http://economictimes.indiatimes.com/IIM-A_to_revise_placement_fee_for_flagship_programme/articleshow/1502401.cms


Being a topic of utmost significance and a decision that we had owned till recently, we discovered the setting was just about perfect for a placecom meeting! The participants of this meeting are the free-riders. (Boopos, Candy, Cosmo, Daph, Deepthi, Oik, Peepu, Slippy, Me)

The stage was all set for another round of heated discussions. But, there is a small issue now. The last meeting was held a fraction under 2 years back. We were then purely the pizza ordering, room cleaning, chairs lifting, walkie-talkie communicating, file making, stationery storing, phone line connecting, catering-desk setting, dynamic scheduling, PPT attending, preferences matching, company logo pasting, e-pigeon maintaining, short-list withholding, CV dead-lining, interview scheduling, recruiter-faculty lunch arranging free-riders!

However, two years down the time line, would the placecom discussion still be the same? Or will all of us look at things differently given the “professional-ization” that we have been subjected to! Let’s take a glance as to how things have changed and the influence that professional life has had on us.

Given the gravity of this problem and the possible repercussions it could potentially lead to, free-riders decided to take a day off to meet at Placecom office, Wimwi, Vastrapur. The venue for the meeting was the same old rectangular room in placecom, now with air-conditioning support to manage the temperature that the discussion could possibly result into!

We entered the room and quickly assumed our standard seating configuration. Let’s take a peak into how the discussion started off.


Me: Let’s order some pizza yaar, long-time no free pizza!!

Peepu: Get serious guys, we are meeting after a long time. All I can say is that I missed you all a lot. Those were simply amazing days, those discussions, those night-outs at LKP…

Rest of us: abe koi iska senti band karwao…!

(Peepu then realized that no one actually reacted to his senti speech. Dumb silence ruled the room for 15 seconds. The leli had happened, now let’s get started with the meeting!)

Peepu: Let me set the context for this meeting. As some of you might have read, insti has decided to charge a fee of Rs 1 Lakhs per candidate across all slots. We are here to discuss this matter and I would like to hear your views on this.

(A pause of 15 seconds again…)

Slippy: Let me pitch in, since rest of you still don’t seem to be in any mood to discuss! While setting up the retail chain that I did recently, we had to pay similar amounts to the building constructors per store across all cities in India. I see a lot of synergies of this discussion with my current work and I think insti is justified in asking for this fees.

Cosmo: I think there are multiple sides to this issue. Being a CA, I know how difficult things can get between placecom and insti – the sheer mammoth task of reworking the credits and debits into different slot accounts will require a lot of understanding of accounting basics. Then there is this issue of deferred tax that comes into picture and we need to figure out the possible impact it would have on the resulting ratios that wimwi would get to…

(Dumb silence again engulfs the room; we are all reminded of the dreadful Manac classes and quizzes of first term at wimwi way back in 2003. Candy and I exchange “extreme give-up” looks! Boopos appears to have understood some part of this funda with a nod of his head that either implies that he actually got the funda or he is looking at this as an opportunity to improve his listening skills!)

Comso: … add to it, with the extra cash flow coming in, insti can think of investing in infrastructure bonds that I recently recommended one of my clients to invest in. Typically, high return bonds and there are plenty of tax exemptions under section 420 of Indian Accounting and Tax Act…

(We all again look at each other, with high levels of internal self-doubt and body language that read “anyone else in the same boat? Or am I the only one who still doesn’t understand Manac?” None of us dared to speak a word. It required a brave soul to pull the discussion further. Who better than the anti-placecommer to take it forward)

Deepthi: I don’t want any companies to come on campus. It sounds so stupid to ask for money – okay call it fees. Ever since this article has been published, the recruiting head of my company simply refuses to go any further than one sentence with me on phone call…

(Free-riders burst out in laughter. We all are reminded of Deepthi’s “heellllaaaaa” on phone. We totally understand the agony that Deepthi’s recruiting head had to face and he/she is perfectly justified in keeping the phone down. May be, it’s not the fees debate, it’s just Deepthi driving his/her reaction!)

Oik: Wot the hell? These booshtaards don’t understand the implications of this decision. I spent some time in US and there students from best of schools actually go out and give interviews. So, charging 1 lakh is not a lot and insti must do it. Wot the hell…

Deepthi: Oik, you don’t understand the consumer’s point of view. In all the surveys I have done for projects on campus and at work, my greatest input has been to prove that customers are lying about their preferences. Similarly, companies might say that they will pay, but eventually they will not… Aaai aaam pained by this decision…

Daph: What do you mean by they will not pay? I will Kung-Foo them and get the payment out! I might be getting old, but there is still enough to kick a few recruiters out! Just like I recently scared my boss to death…

Peepu: I think we are deviating a bit away from the main discussion. Being in an entrepreneurship environment, I know how important it is to focus on right things. Do you guys have any sense of financial impact this decision would have?

Boopos: Yeah, I think we should do that. Infact, I will do it tonight. Today seems easy. I should finish my official work early today, by 3am, one hour before my normal time. So, in that hour, I will make an excel model and run different simulations and scenarios for impact of 97 variables including interest rate and exchange rate fluctuations on fees income of placecom and the resulting valuation. I will code a macro for this and when you guys receive the file, simply click the run button. I should send this out by 4am.

(trinnng trinnng… trinnng trinnng…looks like someone just got a call. Oh, it’s Candy with his psued “hello” on phone. He blushes and says “yeah, sure, this evening sounds perfect to spend some quality time together on this”… and rest of us are like… “dude… kya crack maara hai!” He finishes the call and is back to the discussion. To break the anxiety (and jealousy?) surrounding the placecom room, we asked Candy… “ehh… bandi?”… and our man nods in disapproval… “again a call from my boss… chutti pe bhi he wants to have a conference call to discuss the slides… uski to @#&**@^#…” to get back the discussion on track, Candy pitches in with his 2 cents…)

Candy: I will think about the whole situation from buy and sell side point of view. In the recent deal that I had worked on, we supported our client on raising funds for the acquisition that they had decided to go ahead with. So, if the need be, I can help the recruiters raise funds for the wimwi recruitment process. It should be fairly straight forward, after all this doesn’t even look close to a deal of billion dollars. Tell you what, I will actually not spend my time and energy on this, I will ask a new fachchi in company to take care of this.

Peepu: That is a valid point Candy… I think you are right.

Daph: But, there is a chance that companies might make us sign a bond in return, given the high levels of “job switching” that is going on these days…

(I was like chilling out in one corner of the discussion table… I looked at everyone else… and it struck me…they all had chipped in, everyone had put in some CP or the other… ohhh crap, I haven’t said a word till now. What would fellow-free-riders think of me? That I don’t even have a point of view? I will not let this happen. The setting is perfect for a consult CP… I need to show the vision that I have for placecom…I gather all my thoughts to put a consult CP)

Me: Firstly, thanks everyone for all your views. This was a very “insightful” discussion that would go a long way in enhancing our differentiation as wimwi placecom freeriders. But, I can’t believe we have gone through the entire discussion without slides. I think, we need 2 circles at the top of slide, overlapping with a triangle in the middle and then a solid rectangle at the bottom of the slide to support our vision. Then we need to consider the synergies and the factors that would feed into creating sustainable competitive advantage for wimwi placecom in the medium to long term. Once we have envisioned the new placecom with new fees structure, it is critical to get a buy-in from various stake holders. One key question that we need to answer is: Is collecting fees the core of our placecom strategy? If not, shouldn’t we be looking to add value to our core verticals like building sustainable relationships with recruiters? My view to the entire puzzle surrounding the fees issue is that the answer probably depends on the adjacent externalities and the resulting internal fit! We are talking about a potential paradigm shift here!

(There was silence in the room again. I was like… wow, I have proved myself to be a stud!... look at all of them, they didn’t follow anything, total lack of vision I would say… ehhh… sudden change in configuration of the room… oh noo… another typical ending to placecom meeting as Boopos screamed out… Tharki ko bumps!!!...)

Disclaimer: The above post in no way supports or opposes Institute's decision to change the recruitment fees structure. This post is purely for entertainment and any other conclusion resulting out of this post would be purely coincidental. In any case, free-riders are only a minority subset of Placecom 2005 and therefore do not represent the batch's point of view on this topic!

India’s team for World Cup 2007

The countdown has begun! We are 38 days away from the world cup. Amidst the excitement surrounding the event, most teams are in final stages of getting the 15 on paper for the grand tournament. So, what’s going to be our team like? Our selectors have 2 weeks in their pockets before they get down to naming the team.

India’s 3-1 win over West Indies did answer a few questions. Here is what the skeleton of my team would look like for the world cup:

(2) Ganguly to open with Uthappa
(3) Dravid, Tendulkar, Yuvraj select themselves
(1) Extra batsman or bowler depending on conditions
(1) Dhoni, an automatic choice again
(1) Agarkar: Has been consistent enough to be a certainty
(2) Kumble and Harbhajan, both should play in West Indies
(1) Zaheer Khan, again has well done well enough though would need a back-up

So, we have 9-10 players who would play every match.

Before moving on to the other 5 who should board the flight to Caribbean, quick comments on two senior players of the side. Tendulkar’s century yesterday would do his confidence a world of good, apart from getting his one-day statistics back on track. His average is again back to “above 44”! In the last few weeks, there were a few statements made by so-called cricketing gurus that in my view were totally uncalled for, however this aggressive knock should shut all criticism against Tendulkar. With the form he is getting to, World Cup could get exciting, even for Australia.

A couple of months ago, we would have never imagined Ganguly to feature the above list. But, he has made a terrific come back, would go down as one of the greatest fight backs in the history of cricket. I have been and I am a Ganguly fan. Despite this, in my view, Ganguly was out of the team for all right reasons. There was never a question mark on his talent – it was more to do with his attitude. Now, he is back with a bang, looking a lot more focused with no airs surrounding him about being the ex-captain or the Prince of Kolkata! Let’s hope Ganguly continues to perform, a consistent Ganguly is a must for India’s chances at the World Cup.

Back to the team selection, the contenders for the other 5 slots are:

Irfan Pathan, Munaf Patel, Sreeshant, Dinesh Karthik, Sehwag, Suresh Raina, Gambhir and Ramesh Powar.

I am still not sure if Sehwag should be counted in the scheme of things. Just like Ganguly a year down the time line, with Sehwag it is again not a question of his ability or technique. It is the attitude and focus that is missing. Selectors should probably give him 1 or 2 matches against Sri Lanka and observe his attitude on the field, not the number that appears on the score card eventually. I would much rather see a determined Sehwag scoring a fighting 30-40 than an attempt at a run-a-ball flamboyant 50.

I would include Pathan for the balance that he gets to the team, with Munaf Patel and Sreeshant as back up bowlers if India decides to go in with 3-4 pace bowlers. Karthik would be the 14th in my selection list and for 15th, it would all depend on the question around Sehwag. Otherwise Raina should probably make the cut.

Let’s see how the home series against Sri Lanka turns out to be. The team should now stop experimenting (other than a chance to Sehwag probably) and play consistent cricket. Wishing team India all the very best for the World Cup!

Little boxes, little boxes...

Little boxes on the hillside, Little boxes made of ticky tacky
Little boxes on the hillside, little boxes all the same
There's a green one and a pink one and a blue one and a yellow one
And they're all made out of ticky tacky and they all look just the same.

…a song by Malvina Reynolds – looks like I am a big fan of Malvina Reynolds, right?

Well, that is however far from the reality. I have known ‘Reynolds’ as a pen brand, I have vague memories of ‘Reynolds number’ from my CDC classes, but Malvina Reynolds... I had little clue about, till I ‘googled’ for ‘little boxes lyrics’.

Okay, with a rather complicated, convoluted and nonsensical introduction to this post, let me jump to the topic directly. This post is inspired by what I would call as the advertisement of the year (in my books, based on sample set of very few advertisements that I have seen in the recent past. I see very little of TV barring cricket matches!). As you would have guessed by now, we are talking about ‘Maruti Zen Estilo’ advertisement. Two parts to this post flowing out from the title – one being Maruti Sukuki and its latest offering Zen Estilo and the other being an outlook to the exciting times awaiting the Indian small car industry – little boxes on the hillside, little boxes made of ticky tacky…

Revival of Maruti’s fortunes

Zen was first launched in India in mid 1990s. I have personally never been a Zen fan – to me, it has always been an over-priced car. Yes, it had the engine power, sophistication and smoothness, yes, it had a bit more of space than a 800, it did look a bit better than a boxy 800, but all factors combined, in my books, Zen was nowhere close to being worth the price tag attached. However, the new Zen Estilo seems different – the styling and designing being the most significant changes.

Within 10 days of launch, the tall boy design had attracted 10,000 bookings and this figure must have gone up substantially since then. It is fairly well positioned with the VX version being close to 4.1 Lakhs on-road Chennai. I didn’t get a chance to take a test drive, so will reserve my comments till I get an opportunity to get behind the wheels, but it does look like a car that’s going to sell a lot.

Let’s zoom-out the camera and shift our focus to Maruti as a company now – with the controversy surrounding the ownership structure behind, Maruti has looked a totally different company, introducing new products and aggressively increasing its capacity in a bid to fight back its decreasing market share. 2006 was characterized by Alto becoming the largest selling car in India, very successful introduction of Swift, a new look lower priced Esteem and then the promising launch of Zen Estilo. Interestingly, Maruti Engineers were involved with Suzuki’s global team in designing Swift which has been a huge success globally. Furthermore, Estilo is almost a 100% Maruti product, with engineers in India renovating the model with very little support from the parent company. It does look like Maruti has started to stamp its authority with these significant developments and I will not be too surprised if Maruti would become Suzuki’s biggest plant, overtaking capacity in Japan, in the early part of next decade. Currently, Maruti has an installed capacity of close to 0.6 million, while Suzuki globally is close to 2.2 millon mark. Maruti accounts for ~25% of global Suzuki sales and this figure is bound to go up. In comparison, Hyundai India has a capacity 0.3 million, soon to be expanded to 0.6 million.

Small Car Industry

The story of Indian small car industry dates back to the time when Maruti 800 was first introduced. Since then, this segment (industry definition being category A and B cars) has grown to become the largest segment in India, while globally Category C cars lead the way (Accent, Esteem, Ikon, Indigo, etc). While all through, new models have been introduced, old ones upgraded, the industry in my view has been through two critical phases and the third one is just around the corner:

1. Early 1980s: Introduction of Maruti 800: A fuel efficient, reliable new product with low cost of ownership and modern features – it was surely a big jump from Ambassadors and Fiats that Indian market had then
2. 1998: For most part of 1990s, the small car industry developed and reached scale volumes, a few new products were introduced (including Zen), but it was all much the same till 1998 when Santro, Matiz and Indica hit the road (these cars really did hit the road running)! It created a totally different segment, providing customers with all the features of mid-size cars in a fuel efficient, compact car. In years to follow, Category B became the largest segment with Santro and Indica emerging as the winners.
3. 2008 and beyond: In about a year and a half, the industry would once again go through a dramatic change. While the previous change was all about offering an enhanced product, this is going to be pure scale game. Yes, I am talking about the Tata 1 Lakh car!

As of now, Maruti 800 is probably the cheapest car in the world. Tata Motors, with reasonable auto design experience and know-how, is trying to beat that by driving the cost down further. I have followed the development of this car closely both from technical and business perspective over the last couple of years. When Tata Motors first came up with the idea of 1 lakh car, my reaction was “wow, wouldn’t that sell like crazy?” Since then, like everyone else, I have had doubts about the success of this ambitious project. It is difficult to get the pure manufacturing variable cost of a car to under a Lakh. Add to it, the amortization of fixed costs, the margin for economic rate of return, taxes at various stages, dealer margin and the puzzle does get challenging.

For all I have read about this project, Tata One-Lakh Car would in all probability have the following features:

1. A bit smaller than Indica, though big enough to seat 4-5
2. 30 bhp, 700cc engine – probably 5-10 bhp lesser than ideal
3. Would meet safety and emission standards
4. Design would in all probability be a bit sleek and not too boxy
5. Automatic transmission with engine at the rear
6. Basic model would roll-out without doors

On a standalone basis, looks reasonable, rather attractive for the magic price tag of Rs One Lakh. But let’s consider the choices that consumers would have to determine the success of this project:

1. Maruti 800 sells at Rs. 2 Lakhs, but apparently, the cost of production is much lower than the final price (achieved due to scale and old fully depreciated dies). Maruti could easily slip the price tag down to ~1.5 Lakh. Given this likely scenario, Tata 1 Lakh car would need to match Maruti 800 as a product to have any chance of getting to the volumes that they desire.
2. The biggest challenge would be the 2nd hand market - to beat a 3 year old Maruti 800, a 4 year old Alto (now that’s not easy) and a 8 year old Santro
3. The car might sell, could do really well, but for Tata to make money on this project, the annual sales need to touch close to a million. That’s 3-4 times the market currently occupied by 800 and Alto.

So, where is this battle heading? Can Tata Motors repeat the success that they have had with Indica and other models or is this project a little too ambitious? Although I have little data and knowledge to back my claims, here is my best guess to the final outcome of this project:

1. The basic version would cost ~1.2 lakhs. This version would be a complete car, however without proper doors. Tata motors needs to be creative with the door part. The minimum expectation would be to have very basic plastic doors instead of an open air compartment. I would hate to see a 4 wheel auto rickshaw as the basic version
2. However, for most practical purposes, the much awaited car would cost ~1.4-1.5 lakhs with proper doors. I think it would look a lot better than a Maruti 800 and with a 660 cc engine, should have a fuel economy of ~25-30 km per litre
3. Tata Motors needs to be clever with positioning of the car. The basic model is a must to get people interested. Perhaps, all advertising campaigns should revolve around the basic model – the true one Lakh car (in 2003 rupees, accounting for inflation) trying to fulfill the aspirations of millions!
4. Once the customers walk in to the show room, show them the benefits of buying a complete car priced at 1.4 Lakhs. What otherwise looks like a difference of INR 30 K, becomes much less significant on a per month EMI basis. People wouldn’t mind paying extra Rs 500-800 a month for safety, comfort and the feel of owning a full-fledged car!
5. Will Tata sell a million units a year? I can’t answer that. However, I wouldn’t bet my money on anything more than 5 Lakh units in the first few years. At some stage infrastructure constraints would come into play. Can our cities take the extra traffic?
   

Well, sounds like really exciting times at Tata Motors. Let’s wait and see where this phase of auto industry leads us to. In the meanwhile, I would go back to the song I started the post with…

“Little boxes on the hillside, Little boxes made of ticky tacky…”

… as it looks for now, little boxes could well be eventually made of ticky tacky to further drive down cost!