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Exhuast Note #7: Tata Shows Patience is a Virtue

I recently attended a presentation with a panel of Indian-market experts, at a Society of Automotive Analysts meeting. Much was covered, discussed, and analyzed, and we were shown more numbers than you could shake a stick at.
A couple of points stuck in my head. Among them: Indian companies and people seem more patient and willing to learn, yet still ambitious and effective. Another: As a basic cultural value, the Indian population doesn’t seem to care all that much for cars.


Tata is Ready to Learn
Tata Motors has been making vehicles since 1954. They aren’t newcomers, though most of their history is with commercial vehicles. The company is expanding on the global scene slowly and carefully. The purchase of Jaguar Land Rover is the first step for playing with in the big leagues.

The acquisition gives Tata an excellent source for learning about vehicle engineering, dynamics, safety systems, and generally taking vehicle production and development to a new level, from all of the storied British brands’ successes and failures. Tata is also savvy enough to realize it is unwise to mix their brand in with the storied Land Rover or Jaguar at any dealer. India’s business landscape is full of managers and executives educated at Western universities (mostly U.S.) and in modern management theories. This is an opportunity to study the global automotive market up close and personal.


Tata’s Nano: Base Interior Above, Luxury Interior Below


Maybe Automotive Passion Skipped a Continent
At the SAA presentation, the issue of increasing salaries and their impact on India’s low-cost labor force was illustrated by the example of fresh-out-of-school IT engineers. Salaries have risen around 35% since 2005. A $7000 annual salary may not sound like much to Americans, but to any CEO a 35% increase in labor cost is quite significant.
While IT engineers are in demand, automotive engineers’ salaries have not seen the same dramatic jump. Why? Indians don’t have the automotive lust we do, IT engineers have betters hours, and IT engineers are more popular in India.
Our SAA panelists told us that the educated and professional classes see looking beneath the hood of your own car or doing your own maintenance as beneath your dignity. By contrast, in the States fixing up an old car is as likely to be a father-son (or daughter) experience as much as playing catch or going fishing. India does not seem a culture passionate about automobiles.
Cars are, apparently, simply transportation. And in Indian urban centers, may not even be the most practical transportation. In the States, cars are our freedom, our passion, our heritage, a rite of passage, and a tool for life. Our vehicle choices speak volumes about our personalities and life stages. How will Indian companies find the spark they need to create vehicles international customers will get excited about? Will ambivalence make them more clear headed when it comes to product decisions? Or is there a future (gasp!) for non-emotional automotive purchases?
Time will tell how this all comes out. Will China’s Hare beat the India’s Turtle for a larger piece of a future global automotive pie, or will slow and steady prove the right strategy again?

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