A new kind of consumer
Today is the day of the ‘people’s car’ launch, and its no exaggeration to say that this car is likely to transform the face of India’s traffic, both for better and for worse. The good: If creating widespread access to better services and products is the aim of free markets, then the Nano car is a triumph. It has made the dream of owning an automobile attainable for millions in India. The bad: The car will probably increase overcrowding on roads and pollution. But as long as our cities lack viable mass transit systems, people have no choice but to resort to private vehicles, and poorer Indians should not be denied a choice that the middle and upper classes have had for so long.
For Indian companies, the Nano is only the most recent success when it comes to making products and services suited to the Indian market. C. K. Prahalad has written about these low-cost approaches many Indian companies have adopted in his book The fortune at the bottom of the pyramid - of companies targeting the poorest citizens and turning them into consumers, by selling them two rupee sachets of detergent and shampoo, bringing them internet access through community kiosks, providing loans through Self Help Groups and even providing low-cost health care, such as Arvind Eye Hospital.
And as we weather the global recession, I think this approach is only going to gain steam - India’s countryside has not been as affected by the recession, and rural India is even showing signs of above-average growth. Hopefully, this will draw our markets into the villages, help address our long-lamented ‘urban rural divide,’ and do its bit in empowering our rural poor.
March 23rd, 2009 at 10:42 am
Well Timed Post!!
March 23rd, 2009 at 2:25 pm
India has a huge untapped market in rural India and its about time Indian companies capture them. This will only make life better for everyone and hopefully reduce migration to over-crowded cities.
March 23rd, 2009 at 3:50 pm
Nano looking at selling 5 lakh units in its first phase is truly marvelous. Taking the 1 lakh figure they will generate 5000 Cr in Phase I only. But leaving all this mathematics aside where are the roads inside to take this 5 Lkh Nano’s. Even if we talk about tier 2 and 3 cities the condition is on verge on getting bad. With Nano’s launch though the great Indian dream of achieving impossible is coming true but at the same time it will eat us in turn if there is no infrastructure. Everyone will be proud of his own small car but when he will get frustrated with no rods to enjoy her first car. Hope fully people won’t buy it in cities like Mumbai and Banglore, otherwise we will have to built bridges over bridges, one for buses, one for ricks and one for Nano
March 23rd, 2009 at 7:38 pm
Of course Mr Tata knows about the road conditions in India. But, he is probably setting his sights on SE Asia, W Africa, even Europe !
Given that, Nano is priced at around the Bajaj auto-rickshaws, it would be interesting to see what unfolds. When Tata Indica entered the cab market and now one cannot see Marutis in that area anymore. So, if Nano were to encroach into auto-rickshaw market (yes, the pricing need to be worked out some), Mr Tata might probably have contributed into solving the mass transit problem a bit !
Then we have the problem of connecting remote areas with surrounding towns/cities. These are the places which might see once in a day, a bus roaming around multiple villages picking (piling ?) fares before disgorging at the town/city. Nano would definitely contribute in this area.
March 24th, 2009 at 4:30 am
A lot has been said since the launch of Nano that it would clog already overcrowded roads to an extent that it would halt the traffic.
Some of who can afford pricey cars are upset with the fact that now a lot of people with smaller paying capacity will join them in use of almost free road infrastructure in most democratic fashion (each one consuming almost equal size of the car, just as each vote carries the same weight).
Their another garb is increase in pollution because of common man driving a car, which was fine as long as they were producing it.
I think it would be an hypocritical to call Nano a bad thing from any point of view.
It is kind of counter-intuitive, but Nano can become a reason for progress on public transport. If Nano really clogs roads, and if indeed people in power corridor suffer from it, their can be change in apathy towards public transport from policy makers. Remember, it took drastic pollution levels in New Delhi’s air for Delhi to go CNG, and become green city as it is today.
March 24th, 2009 at 9:57 am
From the Tata Nano to Elections - to A changing India - are we ready to speak the truth?
“and poorer Indians should not be denied a choice that the middle and upper classes (WE) have had for so long.” - I think putting us (the privileged) in context with our words of choice is the only method to make us realize of how blinded we are with our greedy lifestyles.
“urban rural divide” - Once again - the rich will feed off the struggles of the working poor. We have no shame in saying we work for the least among us; a true reflection of our society will effectively show that we (the privileged again) have always done more and will continue to look out for the interests of number one : ourselves.
I am guilty of this - this is the change I’m trying to bring - let us first admit our own greed before praising the empty promises made to the least amongst us. Your opinions Sir?
March 25th, 2009 at 1:26 pm
Nano is India’s solution for car
Zoho is India’s solution for computer apps .
Nandan sir, Its high time Infosys does some real creativity and forget profit motives as we have all seen money cant be end to any road .And I strongly urge Infosys to create world class solutions but the first focus should be India with Indian mindset .
Its long time India has ignored its farmers which is traditional strenght and such a beautiful thing , why cant Indian IT/Infosys collect their problems/requirements get to plan well and then implement something for them ?
The approach this time should be non profit motivated if we want to create develpment and hapiness at the same time.
March 25th, 2009 at 1:29 pm
Alok has a very good point , Indian IT workforce/creative minded people should be alligned to solve Indian problems .
March 25th, 2009 at 5:42 pm
Alok, Venkat,
I know, you want Mr Nilekani to respond - but, here are my comments anyway.
Getting IT to solve problems has never been a problem - be it in India or in any other country. The challenge has always been the “support infrastructure”.
For example, if the farmers were to be benefited from IT, then do they have enough supporting infrastructure (both h/w and s/w) ? Can the farmer afford a cheap enough computing device (laptop, desktop, hand-held, etc.) ? If yes, is there sufficient electricity (solar, lunar, whatever) to power them up ? Connectivity ? From a s/w perspective, can the farmer communicate in his/her native tongue ? Does the device “come up” in native language (e.g. BOSS bosslinux.in/ ) ? Can the farmer securely conduct banking transactions from the remotest corner in our country ?
Finally, India has the unique challenge of multiple languages. Indian Railways booking counters will accept forms in almost any language. A s/w infrastructure must exist to support this flexibility.
I am an IT professional. And if I were to think of one help to the community from an IT perspective, I am forced to back out immediately. Otherwise, it becomes a ‘band-aid’ approach.
The Indian IT ‘problem’ is a “government scale” problem. The government needs to step in to establish some common ground. And, before long, farmers et al would be demanding solutions - not us going to them.
March 25th, 2009 at 5:47 pm
And, here is a related comment that I made in this blog for an earlier post : http://imaginingindia.com/2009/03/15/the-changing-guard/#comment-600
March 27th, 2009 at 9:15 am
Unaimed Opulence: I don’t think growth is zero-sum. The cities have an interest in seeing the rural country grow, and the way for India’s middle class to survive is to expand its numbers, as millions more move out of poverty. You can look at my posts on access if you’re interested in my views on this.
Alok: Yes, I agree- the middle class and corporations need to do more. But corporations cannot be effective by themselves without better government policies - that eliminate AMCs, electrify villages, and so on. We cannot replace the government in the public sphere and investment: after all, the middle class and entrepreneurs pay taxes to the government so that they invest in broader well-being and development.
Additionally - and here I come back to the comment Unaimed Opulence - our ‘urban rural divide’ has allowed our legislators to talk about our issues of poverty and development as ‘one or the other’. We discuss policy and reform as either pro-poor or pro-business, when in reality, good policies (direct subsidies, IT infrastructure, loosening of red tape on local/rural entrepreneurs and especially small businesses) are both.
March 30th, 2009 at 6:47 pm
You mentioned about empowering rural poor in your post. But Nano is actually more about empowering urban poor and rural rich. Those 2 sectors of current Indian population very well be fortunes at the bottom of pyramid.
Very good blog. you need to write more frequently. Bought your book while in India in DEC and gave it to friend. Waiting for a US release.
May 26th, 2009 at 7:18 pm
I believe that one other important change that Nano will bring along - improvement of roads in interiors.
Nano will easily come to reach within working population in 3tier towns.Towns were road is just a formality.And people dont feel the bad quality, because two-wheelers rule these places.
I think with Nano like cars now becoming reachable to people with smaller earnings in smaller towns, the need and voice for good roads will become louder.