Automotive Globalization: Both Low-end ($2500) and High-end ($50k) Car Markets Thrive in India
Nano, Tata Motors' Rs. 100,000 (US$2500)"people's car" (pictured above) was unveiled at the Auto Expo 2008 in New Delhi today.
"This is a proud moment for India. It demonstrates India's technological and entrepreneurial ability," Commerce Minister Kamal Nath told reporters on Thursday. "It fulfils the need of the common Indian who aspires to move from a two-wheeler to a four-wheeler," he added (see top picture above).
See a picture gallery of the Nano.
Watch the launch video here.
At the same Auto Expo, GM announced it may launch its Cadillac and Hummer models in India this year as incomes surge in the second-fastest growing major economy in the world, after China. The number of high net worth individuals in India rose 20.5% in 2006, the second-fastest growth in the Asia-Pacific region after Singapore, suggesting that there will be a growing demand for high-priced luxury vehicles in the $40-50,000 range at the same time that there is a thriving market for low-end $2,500 Nanos.
Comment: We hear a lot about the loss of U.S. jobs due to outsourcing to India, from Lou Dobbs and presidential candidates like Obama (''I'll be a president who ends the tax breaks for companies that ship our jobs overseas and put a middle-class tax cut into the pockets of working Americans who deserve it.") What receives considerably less attention are the significant number of jobs that are created when U.S. companies expand overseas by SELLING products to Indian consumers, who are becoming increasingly wealthy.
For example, GM already plans to sell 90,000 vehicles this year in India and aims for a 10% market share of the growing vehicle market there, and many other U.S. companies have established a presence in the second fastest growing economy in the world: Dunkin' Donuts, McDonald's, Pizza Hut, Starbucks, Wal-Mart, Foot Locker, Harley-Davidson, etc. Trade works both ways.