China Car Forums banner

1 - 20 of 35 Posts

·
Registered
Joined
·
772 Posts
Discussion Starter · #1 ·
http://www.economist.com/business/displaystory.cfm?story_id=8413155

Carmaking in India
A different route

Dec 13th 2006 | KOLKATA
From The Economist print edition
While China's carmakers copy, India's are inventing

THE idea is not new. Making low-cost cars played a huge part in Europe's economic surge during the 1960s—and created classic designs such as the Mini to boot. Now a new generation of ultra-low-cost cars could have an equally dramatic impact in Asia. For years, industry experts believed that such vehicles would emerge first in China, which is already the third-largest car market and the source of low-cost-everything-else. Yet the focus has now shifted to India, a country with terrible roads and a tenth of the inward manufacturing investment.

Last week the government of West Bengal approved the construction of a new factory at Singur, near Kolkata (Calcutta). In less than 18 months, if everything runs to plan, the first examples of a new low-cost car will leave the production line. The firm behind the project, Tata Motors—part of the Tata group, which is fighting with CSN of Brazil over Corus, an Anglo-Dutch steelmaker—has been in the car business for less than a decade. But the Tata group is revered in India for its ability to overcome seemingly impossible hurdles and it has formidable financial resources. Expectations are so high that other Indian states are bidding for future factories and international carmakers are lining up to co-operate with the venture.

The first trials of the new car took place last month at a test track in Pune, near Mumbai. It is not a cut-down version of an existing car, but is an entirely new design. With a rear-mounted 30bhp engine, four seats and a choice of four- and five-door models, it is a “good-looking car which is comfortable to drive,” according to Ravi Kant, the boss of Tata Motors. Most ambitious of all is the price. The car is known as the “one lakh” car—one lakh is 100,000 rupees, equivalent to around $2,100 when the car was first conceived four years ago. Material costs have since increased, but Tata still hopes the price will be less than $3,000 before tax.

Such a price is roughly half that of the cheapest car today, the Romanian-built Renault Logan. Is it possible? Tata executives point to the Ace, a small lorry launched last year that costs around 1.1 lakh, or about $2,500, before tax. It is modern-looking if slightly rudimentary, and sales were limited to three states for months. But manufacturing capacity is now being increased more than eight-fold to meet demand. The Ace is not just popular, but profitable too: despite rising raw-materials costs and limited scale, it recouped its development costs within a year.

Tata's biggest local rival, Maruti, doubts that Tata's one-lakh car can possibly meet safety and emissions regulations. And that is indeed why the Ace is not exported to developed countries. Although it emits very little carbon dioxide thanks to its tiny engine, meeting other emissions standards and crash regulations would be much harder and would make the Ace much more expensive. Road deaths and poor air quality are both growing problems in India.

Even so, Tata Motors is pushing ahead with its one-lakh car and other firms may well follow. Bajaj, a company known for its two- and three-wheelers, has considered making a low-cost car based on a motorcycle engine. The Munjal family behind Hero Honda, a local motorcycle-maker, is also exploring the possibility of low-cost cars. And in Pakistan the Transmission Motor Company, based in Karachi, already sells a range of very basic four-wheelers for as little as $2,200, and has started exporting them to countries including Sudan, Qatar and Chile.

The contrast with China's carmakers is striking. Until very recently, many domestic Chinese cars were copies of the models made by big international producers. Some even combined the front end of one brand's design with the back of another, creating something like a pantomime horse. Such knock-offs were cheap to produce, but manufacturers are fast discovering the limits of this approach.

The lack of underlying engineering skills makes it hard to build reliable cars, and problems typically emerge within a few months. Now that China's carmakers have started to build their own cars from scratch, their difficulties have multiplied. That is why the oft-reported plans of firms such as Chery and Geely to export cars to America and Europe in 2007 have now been postponed for several years.

For the Indians, though, perhaps the biggest concern should be neither foreign competition, nor emissions, nor safety, but congestion. The country's poor-quality road network is slowly improving, but it is heavily over-used. With India's transport arteries already so badly clogged, a boom in sales of low-cost cars could bring about a seizure.
Indians innovate, Chinese pirate.
 

·
Registered
Joined
·
37 Posts
Literacy 91% - 61%
Life Expectancy 73 - 63
GDP 2.2 Trillion - 800 Billion
Poverty under $1 10% - 20+%

KEY
China
India

India is about 20 years behind China, but I agree that India has just as much potential, if not more. But as far as your comment on the bottem, just look at Japan and S. Korea. Obviosly copying works. They both did it heavily and Korea still does to a degree.
 

·
Registered
Joined
·
314 Posts
India may innovate, but their cars are in no way as good as china. have u seen thier roads and how the indians drive?? total nightmare. End of the day India still but technology license from mercedes benz for cars and trucks, piaggio/vespa for thier auto rickshaws, and India's innovation is not substantial enough for it to be independent any time soon
 

·
Registered
Joined
·
314 Posts
i have seen Tata(very very few on UK roads) and it was a truck like the hilux, like a 190e merc sedan modified to a truck by india, its was a horrible looking thing and was 30 years behind:lol:
 

·
Registered
Joined
·
83 Posts
The Tata Indica uses a French (Peugeot) engine with a body designed in Italy. It appears to be selling in places like South Africa quite well, but from what I read, the reliability has been questionable. As the CityRover in the UK, it was a sales disaster, mainly because of the high asking price which put it up against the likes of the new Fiat Panda.

Tata have moved on a long way since the days of the Mercedes cast-offs they produced - and Tata is a huge empire into many different businesses.

The trouble is that Hindustan still make the Amabassador (a Morris Oxford cast off from Britain in the 1950s) and whilst this has been a best seller for many years the new imports and locally produced models from Ford, Opel, et al has meant that the Amby has become something of an embarrasment in a country fast catching up in automotive terms. Many sub-assemblies are made in India for European manufacturers, too.

But from experience on numerous trips, I would say that the Indians are not averse to pirate, either!
 

·
Registered
Joined
·
37 Posts
Besides, I forgot to mention before. Sure Chinese car makers copy a lot but (less and less now). But most of them were founded in the last 15 years. Tata motors was founded in 1945! They have been making passenger cars for over 50 years now and their first cars were....copies. It has taken them that long to get to the level of companies like Chery, that produced its first car just 7 years ago!
 

·
Registered
Joined
·
93 Posts
So, Indian carmakers are planning to make dirt-cheap motorcycle-based cars that will fail to meet emissions and safety standards, further adding to India's congestion and pollution problems. How is this better than China?

But yes, India does innovate, just look at the Maruti 800...


And the Bajaj...
 

·
Registered
Joined
·
176 Posts
Trivia Tim said:
And the Bajaj...
Hell, that Bajaj would sell like mad in the USA. All the burger-flippers would put on low-profile tires, spinner hubcaps, and stupid sounding mufflers. Then add a 2 million watt "earth destroyer" stereo playing death music... I can see it now

"Starring Vin Diesel in his returning role, The Fast and the Even More Incredibly Stupid Looking"...

Ahhh, I love it...
 

·
Registered
Joined
·
132 Posts
Real_I_Hate_China said:
Indians innovate, Chinese pirate.
LOL !

It's amazing to see some one would go great length just to trash Chery, including kissing some brown Indian asses.

Indians aren't innovative, they are good at taking calls but not at making cars.

Chery is a quick learner, all the latest models are its own. It would be harder and harder for ppl like REAL_I_HATE_CHINA to bash Chery. Of course, if you want to hang on to this, I can always tell you what Hyndai/Kia did in their early days, well, actually they are still doing it today to a degree, just look at that logo, shame ... :nono:





.
 

·
Registered
Joined
·
264 Posts
KING_OF_HILL said:
LOL !

It's amazing to see some one would go great length just to trash Chery, including kissing some brown Indian asses.

Indians aren't innovative, they are good at taking calls but not at making cars.

Chery is a quick learner, all the latest models are its own. It would be harder and harder for ppl like REAL_I_HATE_CHINA to bash Chery. Of course, if you want to hang on to this, I can always tell you what Hyndai/Kia did in their early days, well, actually they are still doing it today to a degree, just look at that logo, shame ... :nono:





.
indians are smarter than just taking calls..they are the hub for professionals in the developing nations
 

·
Registered
Joined
·
561 Posts
well at least canada gets more than two medals in olympics. i think i remeber that india only got 2 medals since they started joining the olympics. and at least canada has this.
 

·
Registered
Joined
·
561 Posts
Rock-N-Roll said:
Photoshop?
um no its called the locus plenthore (aka quebec bomber) from the montreal autoshow i posed it on the off topic session a few weeks ago but seems like no one was interested in a canadian sports car. heres more pics if you wanted it.



 
1 - 20 of 35 Posts
Top