The Rs. 100,000 car

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low priced car, Tata Motors

As disposable income increases, so do desires. The well to do youth of India could leapfrog from the thrill of “my first motor-bike ” today to that of “my first car” tomorrow.

Tata Motors is working towards introducing a sedan car for Rs 100,000 or Rs.1 lakh ( as the figure is popularly called in India), the equivalent of $ 2500. The story of the potential market for such a car is described in Time by Simon Robinson.

If Tata were to lure away even 10% of the 6.5 million Indians who buy motorbikes every year, it will have expanded India’s car market by more than half. Competitors aren’t willing to cede that kind of market share without a fight. Carlos Ghosn, head of Renault-Nissan, recently announced that his company was looking at building a $3,000 car in India. Fiat, General Motors, Honda, Hyundai, Maruti (the Indian division of Japanese manufacturer Suzuki), Toyota and Volkswagen are all developing low-cost cars, though none of them have promised anything quite as cheap as $3,000.

Apart from the potentially huge market in India itself, Tata Motors plans to export its economical car to other countries in Southeast Asia and Africa. With its affordability being a key advantage, the Chairman of the Tata Group, Ratan Tata hopes to eventually sell as many as 1 million such cars worldwide each year. Countries like Brazil and Russia could also be possible markets. The project is expected to succeed because of the relatively low manufacturing costs in India- engineering costs alone being estimated to be  half that of Europe or the US.

On the flip side, there may be a high environmental price to pay as poor nations convert from two wheels to four. John Rogers, a consultant for the Asian Development Bank, estimates that the number of cars in India will increase from 6.2 million in 2005 to 41.6 million by 2025.

The new car will offer a viable option for many in India who currently manage- albeit with difficulty- to take their entire family out on their two wheelers!

Dad’s take on Vikram Pandit

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Indian CEOs, Ramani Ayer, Vikram Pandit

Vikram Pandit is very much in the news having been appointed CEO of Citigroup – the world’s largest bank. Founded in 1812, Citi has operations in 100 countries and employs over 300, 000 people. It has revenues of $ 147 billion and assets of $ 1.9 trillion.

A report in the Times of India highlights the fact that 15 out of the Fortune 100 companies are run by foreign-born executives, including three of Indian origin. Pandit joins the list of  Indians in CEO positions like Indra Nooyi of Pepsico, Arun Sarin of Vodafoene, Ramani Ayer of Hartford Financial and Shantanu Narayen of Adobe Systems.

Most India-born executives readily acknowledge their debt of gratitude to a society that emphasizes industry and hard work and honed their survival skills, if nothing else. Times of India quotes Ramani Ayer as saying” I have benefited from my Indian background. Growing up in a very simple family with a real passion for hard work. In other words, you never stopped working. Work was liberating and work was part of what defined who you were”.

Undoubtedly, India’s traditionally strong family based values have helped these executives. Vikram Pandit’s 84 year old father had some nice things to say about his son in an interview in the Times of India.

Cut Attrition Through Better Selection

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A Step A Day, Attrition, selection process

We were discussing the reasons for attrition at a client company. Bob, the manager in-charge of the centre said ” It’s difficult to put a handle on why people are leaving. At times we feel it is the market place and opportunities outside that fuel attrition. At others, we feel may be there are things we can do better to retain talent”.

That’s true. There is no easy answer. The reasons people say why they are leaving are often not the real reasons why they are leaving. In my experience, compensation is often cited as the main reason why people leave but the truth is that people leave for factors other than compensation. The reasons why people leave an organization are not the same reasons why they joined that organization in the first place.

I told Bob ” I strongly believe that the first step to reducing attrition is, no, not increasing compensation but improving your selection process.” Better selection results in better “fit” and the chances of attrition are reduced if the overall fit is stronger. “Fit” is not made up of one factor alone- say technical skills. It encompasses issues like fitting into the organization’s culture, having values which the organization embodies, and the ability to display behaviours the organization requires for job success.

In a situation where the demand for quality talent is high, often compromises are made at the selection stage. These are done for purely short -term gains.”The project is stuck. We need a guy with his skills”, “No one here has knowledge of that geography” etc are reasons trotted out to explain away such compromises.

By the way, some candidates look to the short term, too. To add a seemingly glamorous organizational name to their resume, to rise up the hierarchy with a more fancy title ( even if was only for a few months) etc.

As I told Bob and his team:

• Know what you want when you begin the selection process
• Know the reasons why the person is leaving his/her last organization
• Do not make short term compromises
• Hire for fit rather than for skills

Do this and do this well and you will have begun the process of reducing attririton

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