Kolkata - Trinamool Congress‘s line of shifting the auto ancillaries industries outside the project area of the Tata’s Nano project has raised serious questions about the real intention behind their demands First and foremost among them is the Trinamool’s demand is in line with that of the competitors of the Tata group which incidentally want to delay the launch of the proposed Nano car as then the total cost outlay of the project will be in jeopardy as there would be a high cost escalation due to the delay and the Tata’s promise of the 1 lakh car will be difficult to keep . Secondly the whole rationale of the project has been in the Tata’s extreme capabilities of reworking the cost of the car and its ancillary components to its advantage. One of the basic factor of those is the logistics cost which will be instrumental in working out the logistics costs to its favour and to keep it down in this perfectly competitive auto ancillary market, the ancillary industries must adjacent to its mother units. This becomes a precondition for the project itself as the concept of reworking the costs of its components has been the backbone of Ratan Tata’s effort to bring in the market, the most affordable car of the recent times.
The competitors as well as the all the educated people of West Bengal is also aware of all these points .Now the big Question is ,”Why is the opposition supremo of West Bengal and her outfit Trinamool Congress still adamant on their demand of shifting out the ancillary industries outside the project area. This demand infact will raise serious doubts on the viability of the project itself.
On another side the delay in the agitation will also hamper the prospects of the Tata’s being able to launch their planned Nano car which if launched will also showcase the talent of the Indian Engineers in bringing a path breaking project of the world . The state of West Bengal will also heavily benefitted due to their partnership in this path breaking effort . Now the Tata’s project rationale also depends heavily on the economic concept of “Economics of Scale” which is fundamentally based on the factor of Volume production. Though the Tata group is keeping its margin of profit on the lower side, the profitability of the project depends on the Tata being able to continue their volume production in the long run albeit to their capacity of volume sales of its product in the long run by depending on the time advantage and its USP of bulk selling of its product before any perceived launch of any rival product of its competitors.
According to much acclaimed media publications like automotive News Europe and Times London many of the automobile manufacturer of industrially advanced countries like Japan and USA are also contemplating to bring affordable cars in the 2000to 2500 dollars range . Though the Tata motors have tasted success, the other corporate like Bajaj –Renault, Toyota and General motors are not left far behind. They infact are planning to launch their version of affordable car within the year 2010 as deadline. Industry Watchers are of the opinion that the Tata motors have to capitalize on their market within this time making the full use of the first moving advantage.
Now the stalwarts at Tata Motors are facing the double challenges of keeping its price down as the raw material costs are spiralling up due to the inflationary trend of the world economy. Secondly its challenge of offsetting the profit disadvantage that it has by volume production is also facing serious challenges due to the delaying tactics of the opposition supremo According to the version of well placed sources the The Tata’s Nano project has currently created an unprecedented hype in the market resulting in decreased sales of cars even by the frontrunners of the Indian passenger car industry i.e. The Suzuki group, owners of the Maruti –Suzuki brand in India, and Hyundai, who all mainly operate in the a class segment where Tata’s Nano will be its cheapest counterpart. The hype has been so extensive that even the second hand car market is also going through a slowdown as most of the consumers are eagerly waiting for the launch of Nano’. Delaying this project will seriously result in the loss of interest in the consumer mindset which in turn will be reflected by the loss of market of its product both in the national and the Global market.
Incidentally Trinamool’s attitude of delaying the project also will result in the same direction. Not only it will result in the loss of face by the Tata group but it will also pose a threat to the whole venture.
Is this linkage between the objective of the competitors of much acclaimed Nano simply coincidentary or is it the result of some……..? Doubts are bound to arise in the entire concerned citizen’s mind?
