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Old 26th April 2008, 02:05   #16
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Originally Posted by Steeroid View Post
My question is very simple - how did these companies that for years sold antiquated bits and pieces to a protected market now have the money to buy brands that other more established auto majors cannot, or do not want to?
I am only rehashing what Mpower has already said and what you already know - The license raj did as much damage to Indian corporates as it did to the Indian consumers. Companies like Bharat Forge, Tata etc could not grow because of the protected market. They were stradled with limited products, huge labor etc.As soon as the markets were opened, these very companies streamlined their business and became innovative and profitable. So the aquisitions we are seeing now aren't being made with the money earned during closed markets, but it started in 2000 with Tata buying Tetley tea - The first biggest overseas purchase. The 10 years of economic liberation see the value of the companies go up many fold.


I read in a recent article that Bharat Forge grew atleast 10 times in size since 1990 and at the same time cut its labor by half, transitioned from predominantly blue color work force to white color with 80% being graduates. I am not sure if these are exact numbers but they are close.

Last edited by Mayavi : 26th April 2008 at 02:06.
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Old 26th April 2008, 03:59   #17
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Tata, Mahindra and others kept selling us old and antique pieces of automotive specimen till the economy was opened up and there was some competition.
That is true but it wasnt only Tata and Mahindra who did that.

Maruti/Suzuki did that on a much larger scale, selling us antiquated crap that was 2 decades behind the rest. They still sell the M800 and yet had the temerity to mock Ratan Tata's statements on the Nano. There had released several 'all-new' Zens that turned out to be nothing but ugly plastic cladding added on to the body. And even in recent years the much hyped Zen Estilo was released in India purely because Suzuki had finished using the dies for the MR Wagon and no longer produced it.

And who can forget the kind of vehicles Peugeot introduced in India.

Its one thing being Tata or Mahindra who didnt have the technology to release state of the art cars (due to lack of incentive for R&D). Its quite another thing and much worse IMO to be a company like Suzuki or Peugeot that has the technology but dumped antiquated crap on the Indian market because they looked down on Indian consumers.

The Koreans were really the first foreign firms to respect the Indian consumer, not just in cars but other things like consumer electronics.
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Old 26th April 2008, 04:02   #18
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Well granted that Tata & MM are still playing catch up due to various reasons including limitations of the License Raj.

But what the hell has Maruti contributed to India to make us all proud.
Granted it gave us the Maruti 800 when all we had was the Amby and Padmini, but the license raj was what gave it the dominant position today.
I know im

Other than make, sell and service phased out Suzukis for 25 YEARS it has done absolutely nothing to make Indians proud abroad. Its new competition that made them bring newer models, or trust me we would have still been stuck with the exciting 2008 Maruti Esteem with beige interiors. Late comers like Hyundai and Ford were far more focussed on using India as an export hub than Maruti, who ships Altos in negligible numbers considering their domestic volumes.

How many Maruti Suzuki models models can one point out proudly when abroad saying this was designed and made in India, ZILCH. After making cars and being in a dominant position for nearly three decades now, thats pathetic. Other than the tall claims made lately, Maruti Suzuki never came close to realizing the R&D and Export potential our country has. It was more focussed on raking in the Indian volumes for the Japanese mother ship.

This is where Tata and MM are working hard. Hats of to them.
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Old 26th April 2008, 09:27   #19
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The main difference between Tata, M&M and MUL was the government investment/management/partnership in the company. I don't think Suzuki would've been keen to sell it's decades old 2 thingys here. Atleast, they would've tried and pushed cars which were running out of production elsewhere by using their machinery/dies like in the case of Zen estilo. Even the 1000 and Esteem took it's own sweet time to make it's appearance on roads after it's paper launches. I remember reading an interview with the then MD of MUL, Mr. R C Bhargava in which he was asked of why they didn't launch wagon R, Alto etc.. Before Hyundais came into the country. Also that "doesnt MUL feel that they are a bit delayed in trapping the market" etc.. For this the replies always hinted on to the point that even after too much pressure from the Japanese, our government wasn't much in a hurry then.
Now that MUL has changed to MSIL, we get to see more and more models coming in. It's another matter that some where older ones like Estilo and some very latest ones like Swift. But, the fact is they always made good cars backed up with good A S S and customer care.

Regarding older cars being launched here, what about the Qualis? It was almost a 14year old design when it was launched here. But that one vehicle changed the way we looked at cars and UVs. It became one of the biggest selling and most favourite amongst us. And when the right time came, it was replaced by the latest, Innova.

We should also learn how a company tries to operate in a country before we sit leisurely in our armchairs and go nitpicking like old grandmas.
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Old 26th April 2008, 12:08   #20
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Originally Posted by speedzak View Post
I remember reading an interview with the then MD of MUL, Mr. R C Bhargava in which he was asked of why they didn't launch wagon R, Alto etc.. Before Hyundais came into the country. Also that "doesnt MUL feel that they are a bit delayed in trapping the market" etc.. For this the replies always hinted on to the point that even after too much pressure from the Japanese, our government wasn't much in a hurry then.
i think the real reason why Maruti never introduced newer models till recently is Suzuki is not the major share holder. Once it has 51% share it started introducing newer models to compete with hyundai/daewoo.

japanese never release technology to any one unless they are the complete owners.

Till recently many components of the maruti cars are needed to be imported form japan.

maruti was mostly a assembler here till suzuki gained major stake in it.

they think public memory is short and hence they can put the blame on GOI.
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Old 26th April 2008, 20:38   #21
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Originally Posted by Steeroid View Post
I guess you guys didnt get the drift. I really didnt mean this to be another patriotic chest-beating one...

My question is very simple - how did these companies that for years sold antiquated bits and pieces to a protected market now have the money to buy brands that other more established auto majors cannot, or do not want to?

I simply cannot understand how a company that made a Mercedes derived 1969 model truck for over 4 decades in truck and bus formats (remember we have no real BUSes - we only have bus bodies on truck chassis), and another that built WW2 jeeps in various shapes and forms with rags and pieces of plastic for passenger protection are now going around buying up some of the world's most well known brands.???
Steer you missed a crucial point --- The cost of design and tooling was pratically non existant in both the above cases... So whatever profit they made was 100% (figuratively speaking) ... And the Indica has incurred only 1 major cost (1st design), all other iteration's have been made inhouse with little effort .... (rather i look it at more as a vendor effort)

Also in the case of the 2.2, the design was bought and not necessarily developed from the ground up ... If you do some researc online you would realise that most of the developing countrie's have the 2.2 140BHP (+ or - 10%) 320Nm (again + or - 10 %) power outputs ..... For ex : Fiat Ulysses has similar output figure's... (might not be similar tech wise) ....

Something tells me MnM nd Tata bought this engine as a JV and depending on the investment made the power figures of each engie was arrived at ... ofcourse this is just my thought's ... will be great if we can have facts and figure's so that it gives a better understanding ....
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Old 26th April 2008, 23:21   #22
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Originally Posted by Steeroid View Post
I guess you guys didnt get the drift. I really didnt mean this to be another patriotic chest-beating one...

My question is very simple - how did these companies that for years sold antiquated bits and pieces to a protected market now have the money to buy brands that other more established auto majors cannot, or do not want to?

I simply cannot understand how a company that made a Mercedes derived 1969 model truck for over 4 decades in truck and bus formats (remember we have no real BUSes - we only have bus bodies on truck chassis), and another that built WW2 jeeps in various shapes and forms with rags and pieces of plastic for passenger protection are now going around buying up some of the world's most well known brands.

Patroitic chest beating aside, isnt this at OUR expense? Didnt we suffer long distance rides in 'bus'es meant to carry WW2 era cargo? Didnt we rely on Jeep chassis meant to carry guns and 2 soldiers during WW2 to provide us with essential passenger transportation and even carry out ambulance duties sometimes?

So the question is - werent we being taken for royal rides these last few decades???
You have asked a very good question Steeroid. I had posted a clue to this in one of the posts in the 'Tata buys Jaguar-Land Rover thread'.

Tata's purchase of JLR was mentored by Nathan Rothschild (I hope the name is correct) and so was L. N. Mittal's purchase of Arcelor. These Indian companies have recently found some very high-profile and hyper influential western benefactors.

Also one has take into consideration, global strategic changes where there are lot of noises being made about how India is developing a 'deeper strategic relation' with the west. So this is a process of deepening western tentacles into the Indian market and Indian corporates. This is the way how I look at it rather than vice-versa.

I don't view these corporate takeovers as entirely good because I feel that there would also be something to be given back, something that is intangible and out-of-sight of public eyes. Probably it's already been given and no one knows, since these are also strategic affairs. But we need to be more cautious and try to absorb the gains while minimizing compromising our sovereignty in the process. This is a balancing act.
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Old 27th April 2008, 02:28   #23
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I don't view these corporate takeovers as entirely good because I feel that there would also be something to be given back, something that is intangible and out-of-sight of public eyes. Probably it's already been given and no one knows, since these are also strategic affairs. But we need to be more cautious and try to absorb the gains while minimizing compromising our sovereignty in the process. This is a balancing act.
I always remember my friend doing his MBA at Oxford saying me that 83% of the aquisitions were failures so far, and i myself am part of an aquisition(A finnish firm buying an Indian firm) which is turning out to be an utter failure due to market position or corporate games whatsoever, i only hope that our Indian companies wont end up in such a situation in the name of aquisitions.
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Old 27th April 2008, 09:21   #24
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Originally Posted by Steeroid View Post
My question is very simple - how did these companies that for years sold antiquated bits and pieces to a protected market now have the money to buy brands that other more established auto majors cannot, or do not want to?
Its not that the other companies cant afford to, they dont need to. Most car companies have their own design houses which can produce international quality designs. Tatas on the other hand have had to get the Indica designed from IDEA. Thus Tata needed to get a design house in its portfolio and it did. Do the other established companies need a Jaguar/Landrover in their portfolio? No!! But Tata does. With these takeovers Tata now is able to produce cars which meet international standards and can compete globally. Think of how much tougher it will be to start right at the bottom and train their designers to achieve international standards. With this takeover they dont start at the bottom, but start at the top.
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Old 27th April 2008, 09:25   #25
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Originally Posted by Mayavi View Post
I am only rehashing what Mpower has already said and what you already know - The license raj did as much damage to Indian corporates as it did to the Indian consumers. Companies like Bharat Forge, Tata etc could not grow because of the protected market. .
We all cribbed when our economy was protected but today we are able to achieve so much as a country only because our own Indian companies were allowed to grow during this time.

Would we have Bajaj and Hero Honda as big as they are today if Honda and Kawasaki were allowed to enter the market on their own? Companies like Tata and Mahindra would have been driven out of the market by competition from the more established companies.
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Old 27th April 2008, 11:02   #26
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So this is a process of deepening western tentacles into the Indian market and Indian corporates. This is the way how I look at it rather than vice-versa.

I don't view these corporate takeovers as entirely good because I feel that there would also be something to be given back, something that is intangible and out-of-sight of public eyes. Probably it's already been given and no one knows, since these are also strategic affairs. But we need to be more cautious and try to absorb the gains while minimizing compromising our sovereignty in the process.




Comrade Lurker, this was NOT the conclusion I had in mind. However, it is interesting to note that it is possible to reach any conclusion as long as your mind is made up.

Lal Salaam!
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Old 27th April 2008, 11:06   #27
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Originally Posted by lurker View Post
I don't view these corporate takeovers as entirely good because I feel that there would also be something to be given back, something that is intangible and out-of-sight of public eyes. Probably it's already been given and no one knows, since these are also strategic affairs. But we need to be more cautious and try to absorb the gains while minimizing compromising our sovereignty in the process. This is a balancing act.
Something that has to be given back by Tata? You mean the money it is putting into the company?
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Old 27th April 2008, 11:51   #28
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>>Something that has to be given back by Tata? You mean the money it is putting into the company?

Not really by Tata, but by the whole country. Because this is not one-off, these are part of strategic relations are sanctioned by managers of this country and business leaders just take advantage of that.

Rothschild's advisory capacity to the JLR deal is a front, (a cursory look at Tata's balance sheet will show the inability of tata to single handedly finance these takeovers. Who are the bankers that will finance such takeovers in the ideal world ??) That family is in all probability financing this whole Tata takeover using their disproportionate influence with the bankers. It's also his money, or that of his proxies that is being used to finance this takeover. A few months before on even of L. N. Mittal's takeover of Arcelor there was a big article in a French paper on how L. N. Mittal was fronting for Rothschild. The latter openly buying up companies in Europe has many implications considering the past history. So various proxies and fronts are used.

So Tata's are subservient to the interests of Rothschilds. And this has been facilitated because as a country India's elite have decided to move closer to the west. These are strategic matters and nominal moves are placed before public eyes but there is a lot more of co-operation and subservience that goes unnoticed by public. There are a lot of angles to this issue.

We need to be careful. Yes, the takeover of these companies is a moment of joy, but we need to be vigilant to make the most of the situation and not compromise on our sovereignty before the western elite.
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Old 27th April 2008, 17:19   #29
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I have a theory as to why TATA is buying a stake in Pininfarina. I've got some friends who work in the automotive sectors in the UK. One of my buddies work on hybrid tech. The news in his industry is that TATA has been working on a Rover branded car since it decided to buy JLR. The first model will be based on the Indica V3 but will be heavily facelifted for Europe. It's supposed to be very hush hust but round here in the Midlands its become quite well known....

However in Europe we also like bigger cars and Rover in particular is famed for cars like the 75, Sd1, Rover 2000, P5, etc. So TATA need a big car to go after these sales and ensure that they look after the brand correctly. JLR is heavily stretched at the moment designing new state of the art cars so my theory is that Pininfarina is to be used to help design new Rovers, whilst the existing TATA motors people at the Uni of Warwick will be shuffled into JLR.

TATA's group sales are now mostly in the UK (the acquistion of JLR and Corus) has seen to that. But TATA motors has no presence here. Rover will fix that......
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Old 27th April 2008, 23:18   #30
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If true, I think Tata relaunching Rover is a great idea cos the brand still holds appeal in the UK where one can see plenty of 75s, 45s and Cityrovers plying about. And again like TStag's mentioned much easier to use Rover than to establish Tata as a brand.

Also I think the additional brand in the portfolio will help Tata use up the excess labor and plant capacity that JLR possesses and Tata already have models up their sleeve based on the X over and the Indica platform.
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