Blog: Delhi - the last few days
Dave Leggett | 19 January 2004
I'm back in England now but I'll just update you on my last few days in Delhi when I managed to get in front of the two main carmakers and cram an afternoon's Delhi sight-seeing in. Unfortunately, I had a meeting at Auto Expo on Saturday morning, so I couldn't fit in a trip to see the Taj Mahal at Agra. But, to be honest, I didn't really find the thought of five hours each way in a non air-conditioned coach too appealing anyway.
On Friday I managed to get some time with Tata Motors' main man on the car side - Dr V. Sumantrans (he used to be with GM). He outlined Tata Motors' long-term strategy to develop its car business. It was a Japanese-style, slowly-does-it sort of strategy: develop the domestic market base first with value-driven products, then look for exports, develop a solid repuation and build market share. Add new models when the market is ready and upgrade models are needed. By the way, Tata Motors has been quite smart with its engines, offering 1.4L diesels in the Indica and Indigo saloon. Diesel enjoys a significant pump price advantage over gasoline in India.
Dr Sumantrans also seemed quite upbeat on the company's relationship with MG Rover. The 5,000 unit shipment of Indica-based CityRovers that has already happened is 'in the sales pipeline'. So, expect some evidence of significant sales soon (and, to be fair, there must be some pent-up demand from old Rover Metro/100 buyers). But if the next few months' UK sales reports don't show many more than the few hundred CityRovers registered in December, that won't be a good sign. He also said that Tata Motors is working on a number of projects with Rover and there are lots of synergies between the companies - he's 'very pleased' with the way the relationship between the two companies is going. Incidentally, I'd put money on that estate version of the Indica (the Indigo Marina) finding its way to Britain for sale by MG Rover.
On Saturday morning I met with Maruti Suzuki's marketing manager Ravi G. Bhatia at Auto Expo. Maruti is particularly well-placed at the first-time buyer end of the market with the entry level Omni and the market leading Maruti 800. Some 70% of buyers of these vehicles are first-timers. The company has been doing two things to extend its sales reach: there's a consumer finance tie-up with the State Bank of India (9,000 branches nationwide) and there's been a big investment in the company's national sales distribution network. The entry level circa 1980s Alto-based Maruti 800 - cheapest car on the Indian market - has had a new lease life as excise duty reductions have brought its purchase price down. And Mr Bhatia said it will continue for some time yet and is an 'emotional' car for many Indians due to its longevity. The basic Maruti 800 model retails at 2.03 Lakh in Delhi showrooms (1 Lakh = 100,000 Rupees) which translates to around USD 4,400. Tata is planning a very basic and revolutionary 1 Lakh car model for India, but I would say from Dr Sumantrans' comments that such a model - if it can really be worked - is at least three to five years away. It'll involve thinking outside of the box for sure.
On Saturday afternoon I was free, so I took a look at Old Delhi, which included a stroll down the shopping bazaar known as Chandni Chowk (Silver St.). What a place! A tad busy you might say, with all manner of things on sale, food being prepared or sold everywhere you look, goods being carried around by every conceivable transport mode - a real assault on all the senses. I consider myself fortunate on two counts: one, I did not get knocked down by one of the many rickshaws in a hurry, although I did manage to walk into a cyclist carrying two huge chunks of ice (thankfully, he didn't seem too bothered); and two, I did not step into anything unpleasant on the street or side-alleys. Great place to experience though. And earlier in the day I'd caught sight, from my taxi, of an elephant walking down a main street in central New Delhi, mixing it with the regular traffic, a couple of guys riding atop. That really was something.
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