9th March

Countdown to Nano

The article talks about the present battle between the two largest auto-majors of the country, Maruti and Tata, after the latter is all set to launch the much awaited Nano and the former preparing its Alto for the price-war.

Pre-launch of Nano, Maruti was expected to pitch M800 against Nano, but considering the looks and technical superiority of Nano, M800 stood a little chance against it. Thus, Maruti decided to go with Alto by launching an all new low-price model of 2-lakh tag, quite near to the 1.2 lakh Nano and technically better and tested vehicle. Nano, carries a disadvantage of yet to be mass tested. 

Although Tata denies Nano to be in competition with anyone and thus rethinking of its launch with new Alto, the challenges remains the same for Nano. It has to generate huge volumes to recover the amount invested on its research. Volumes can be generated only if it adds value to every segment of society. For a city-dweller it is a good solution to parking problems. For some, a lifestyle, eco-friendly option while for the vast majority, an option to buy a modern car. The biggest advantage with Nano is the buzz it has created in the auto market. The new Alto would just add a Nano-drop to the already exciting Indian Auto Market. 

Paying for our sins

The article talks about why the southwards plunge of rupee against USD has still not raised alarms as it should. But this doesn’t discount the RBI’s duty to intervene to stop this depreciation stride.

There are three major reasons why the alarms haven’t raised despite rupee touching the all time intra-day low of Rs.52.2 as well as overall 15% dip since January. First is the allayed fear of high inflation which generally follows the rupee depreciation but at the current levels of 3%, it is all set to go negative while the oil prices are also currently very low at $45/barrel. Secondly, the exporters have been benefited as the depreciation comes as a boon for them. Thirdly, the depreciation is seen as more of a strengthening dollar then weakening rupee. However, the depreciation puts RBI at cross roads. Lowering interest rates would further aid the downfall. Although our reserves stand strong at $250b, but using them would reflect the losing faith in the currency. Strength in currency reflects the strength of economy and the state of its public finances. But our fiscal deficit of 12% of GDP defies it right away.

Once again India faced the impossible trinity i.e. discord between capital mobility, an independent monetary policy and dismal exchange rate. 

To bee or not to be

The article cautions over the rapid extinction of bees that are taking place all across the world which has raised alarms especially in US and UK. 

COLONY Collapse Disorder, not a word for current real estate downturn or the state of public housing projects, but refers to the rapid decline in the population of honey bees as reported by the beekeepers, both commercial and hobbyists. Apis Mellifera (Western Honey Bee) is a catalyst for a slew of agricultural products that require pollination. US beekeepers earn much more money from renting out bees for pollination then by selling honey. However, their decline is an alarm for the $15b worth of agri-products that depend on pollination. Primary reasons are cited from tiny bloodsucking mites to mobile telephony, GM corp to pesticides. UK govt has even blamed the unregulated practices of beekeepers for the extinction. Solutions like creating bee-friendly zones as well as encouraging beekeepers to keep variety of species have hardly answered the question of the reason for their extinction.

It is sad that the creature which has been an inspiration for management gurus for collective decision making, is facing the existential dilemma which nobody is able to solve.