Gham ka Khazaana (Jagjit Singh, Lata Mangeshkar)

How India beat China in auto exports-Swaminathan S Anklesaria Aiyar

This week, Ford Motors announced that India would be a global manufacturing hub for its new small car, the Figo. This underlines a remarkable new development. India has overtaken China as a car exporter this year, exporting 201,138 cars in January-July against China’s 164,800. What’s more, Indian exports in this period went up 18%, while China’s fell by 60%.

Of other big Asian exporters, Korea’s exports have fallen 31% and Thailand’s 43%. In a terrible global recession, India is the only country with zooming exports. Hyundai has long made India an export hub for small cars, and aims to export 300,000 India-made cars this year. Maruti-Suzuki comes second in exports, with Tata, Mahindra and others well behind. Nissan is about to build a new factory in India specifically for exports. India looks like exporting half a million cars in 2009-10, and should cross the million mark within five years.

What accounts for India’s success? Visionary planning? Long-term strategy? No, India’s triumph was completely unplanned. No planning document ever envisioned or planned for beating China.

Analysts say China has become a great auto exporter because of huge subsidies, an undervalued exchange rate and dirt-cheap credit. But India never aimed at an undervalued exchange rate to pile up large trade surpluses — rather, it aimed to keep the real effective exchange rate unchanged from 1993 onward. India’s interest rates were always among the highest in Asia. It stubbornly refused to reform its inflexible labour laws, with adverse effects on productivity and wages relative to Asian competitors. No Indian strategic vision targeted special provisions or subsidies to the auto sector. Indeed, the sector for years suffered exceptionally high excise duties and sales tax.

How then did this sector become world class? In the early 1990s, auto production was freed for investment by any domestic and foreign investor. Indian planners as well as foreign investors regarded India as a low-skilled, low-productivity country producing third-rate cars like the Ambassador and Premier. Foreign investors came only because car imports were virtually banned. The small size of the Indian car market created serious scale diseconomies.

Critics from both the Right and Left criticized the new auto policy. Leftists claimed foreigners would decimate the industry. Free-marketers complained that foreigners were being wooed to create an inefficient, high-cost industry behind high tariff walls.

Nobody foresaw what fierce competition would do. Auto companies compete by constantly producing new models with improved features like fuel efficiency. Indian consumers are very price-sensitive, so design changes to reduce costs are also vital. India’s auto parts companies had rarely been asked for innovative changes during the old licence-permit raj, when the Ambassador and Premier faced little competition. But MNCs brought in competition, and started a dialogue with auto ancillary manufacturers on constant design changes. To their surprise, they found that Indian engineers had considerable skills, and could make improvements quickly and cheaply.

Bharat Forge, which makes auto forgings like crankshafts and axles, was among the first to realize that India’s big advantage was not cheap labour but cheap skills. The company decided to have no blue collar workers at all, only engineers. This yielded a huge rise in innovation and productivity, and soon made Bharat Forge the second biggest auto forging company in the world.

For new auto components, global giants like Delphi and Visteon typically took three months to go from concept to design, prototype, testing, removal of glitches, and final manufacture. But Bharat Forge found it could do the entire sequence in just one month.

Soon, every auto company and parts maker in India focused on using cheap skills to constantly produce better and cheaper parts and vehicles. Bajaj Auto once relied on know-how from Kawasaki for motor-cycles, but soon found that its own R&D produced far better bikes for Indian conditions. Maruti Suzuki made India a global hub for R&D. And Tata Motors created the Nano, the world’s cheapest car, making the world sit up.

The ultimate compliment to India’s design skills came from Carlos Ghosn of Renault-Nissan. He decided to build an ultra-cheap car (that might compete with Tata’s Nano) in collaboration with Bajaj Auto. In such partnerships, the global partner usually does the R&D and the Indian partner the low-cost production. But Ghosn decided the new car should be designed by Bajaj Auto, which had never produced a car before. Why? Because Ghosn felt it was easier to upgrade from a two-wheeler than downgrade from a standard sedan to produce an ultra-cheap car.

This then is the secret of India’s success. Don’t waste time with strategic planning and picking winners. Simply let competition happen. You will be surprised how the most unlikely sectors can become world class. That’s how India has just beaten China.

The True side of Dr. Zakir Naik- Please see to understand him

In a country, like India where he was born, brought up and given all his knowledge and wisdom propagating this type of thought is really dangerous. If all Hindus start thinking that only we Know the religion which is right and Hindu teacher only knows 2+2=4 and every one else is like a teacher who teaches 2+2=6, or 8, or so on, then, know Dr. Naik would not have been what he is today? there should not be any other faith or religion in India than Hinduism. There should be no other place of worship than Hindu temples. And if we follow the preaching of Dr. Naik, we should force all muslims to convert to the path of Hinduism, demolish all mosques, churches and other places of worships and construct Hindu Temples there.

Bill Gates on mosquitos, malaria and education

Bill Gates hopes to solve some of the world's biggest problems using a new kind of philanthropy. In a passionate and, yes, funny 18 minutes, he asks us to consider two big questions and how we might answer them. (And see the Q&A on the TED Blog.)

Nandan Nilekani's ideas for India's future

Nandan Nilekani, the visionary co-founder of outsourcing pioneer Infosys, explains four brands of ideas that will determine whether India can continue its recent breakneck progress.

Pranav Mistry: The thrilling potential of SixthSense technology

At TEDIndia, Pranav Mistry demos several tools that help the physical world interact with the world of data -- including a deep look at his SixthSense device and a new, paradigm-shifting paper "laptop." In an onstage Q&A, Mistry says he'll open-source the software behind SixthSense, to open its possibilities to all.

Hans Rosling: Asia's rise -- how and when

Hans Rosling was a young guest student in India when he first realized that Asia had all the capacities to reclaim its place as the world's dominant economic force. At TEDIndia, he graphs global economic growth since 1858 and predicts the exact date that India and China will outstrip the US.

Devdutt Pattanaik: East vs west -- the myths that mystify

Devdutt Pattanaik takes an eye-opening look at the myths of India and of the West -- and shows how these two fundamentally different sets of beliefs about God, death and heaven...

Kargil War - Pakistani Army surrenders and accepts bodies

The Pakistani Army puts up a white flag and accepts the slain bodies of its officers in this damning video. Pakistan lost more than 4000-6000 soldiers in the Kargil war, while India lost 500 soldiers. Pakistan generally disowned the bodies of most of its soldiers but accepted a few senior officers.

According to the information fed to every Pakistani, the Kargil war was fought by mujahideen and not by Pakistani Army regulars. This video shows the Pakistan Army very clearly involved at Kargil. They did'nt count on ace videojourno Kunal Verma, filming the whole event. Nor did they count on being outclassed in combat, yet again, by an Indian.

Kargil War

Kissa killer kerosene ka - Marker may turn kerosene into killer fuel

Nearly 6.5 million BPL families who depend on kerosene for their cooking and lighting needs as well as farmers who use it for pumpsets and spray pesticides could soon be exposed to cancer-causing fumes from markers that will be laced with the poor man's fuel to check diversion.

Markers are chemicals that cannot be distinguished once they are mixed with kerosene. But if such doped kerosene is used to adulterate motor fuels, the marker will show up when petrol or diesel samples are tested using special equipment. Since kerosene costs nearly half of petrol or diesel due to subsidy, nearly 38% of supplies for the poor are siphoned off for adulterating motor fuels.

To check such diversion, state-run oil marketing companies are about to roll out the marker throughout the country. But test criteria specified in the procurement norms means only markers with `halogenated hydrocarbons' -- which can be detected using X-Ray (XRS) or gas chromatograph technology -- will qualify, sources said.

Halogenated hydrocarbons are among 189 `hazardous air pollutants' listed in the US Clean Air Act of 1990. The Act bans their use in fuels as after combustion they produce `toxic dioxins', described by US Environmental Protection Agency as extremely harmful to humans and environment. Generally, these chemicals are used to conduct lab tests to detect toxicity in foods and not used in fuels anywhere in the world.

It transpires that no environmental or health impact study was done before setting the procurement criteria, which appears to purely focus on a marker's ability to detect adulteration. Neither is there any hint that a marker will have to undergo a green or health test. This is surprising since as early as 2005, Hindustan Petroleum's then R&D advisor, A K Bhatnagar, had described the problems associated with halogenated hydrocarbons in his presentation on fuel quality made at a Ficci-Petrotech seminar in Delhi.

Company executives, however, said "pollution aspects have been taken care of" in the procurement norms. "The technical committee has laid down elaborate parameters. They will test each marker against those parameters and safety will be assured," a top executive of an oil company who is involved with the procurement process said, requesting that neither he nor his company be identified.

The crux lies in one of the criteria in the norms, called the `charcoal test'. In this test, charcoal should not be able to filter or remove the marker from kerosene. According to sources, only markers with halogenated hydrocarbons can pass this test.

 

Writer : Sangh Priya gautam.sanghpriya@gmail.com

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