Thursday, March 4, 2010

India's Top Vehicle Maker Looks to Africa

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tata Reuters

The Tata Nano EV car is displayed at the Geneva Car Show on Tuesday.

tata

"We're expanding in our 16 markets outside of India," said Abhay Deshpande, Tata's deputy general manager, in charge of vehicle integration with the Nano. "The Middle East, Africa and southern Asia are all very strong." When every other car manufacturer is drooling over the Chinese market, Mr. Deshpande says they're expanding in Africa instead.

"We're the number one brand in Ghana and have a strong market in South Africa and Senegal," Mr. Deshpande said.

Tata also just launched in Nigeria and Tanzania. By focusing on growth outside the traditional markets of Europe, Asia and North America, Tata wants to build brand allegiance in these areas before they become mainstream.

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That's not to say they're ignoring Europe and the U.S. "The Aria and Nano are good for Europe and I think they will work in America, too," Mr. Deshpande said.

In the emerging markets, the Nano is priced at around $2,500. But when it debuts in Europe later this year, the price will be around $8,000, higher in part to account for additional costs to meet stricter safety standards. The Aria, which should be on European roads by 2011 and in the U.S. by 2012, will likely cost close to $15,000.

—William R. SnyderThe Flat Look

Car shows have bright lights for a reason. The intense wattage of the overhead lighting highlights the nuances in curvature and makes the cars glitter for consumers. But on the floor of the Geneva Motor Show, visitors' eyes aren't drawn to the bright, buffed whites normal for Lexus or Audi, but to the dulled surfaces of cars that are absorbing the sparkle instead of reflecting it.

Flat finishes, also called matte paint jobs, are an emerging trend in luxury car design. Mercedes, a customized Lamborghini and another customized Lotus here are all showing off matte finishes, ranging from white to gray. There are at least eight other models touting flat paint jobs, too. Three years ago, Lamborghini designed the Reventn, a $1.4 million limited-run speed freak, whose most noticeable feature was a matte finish that mimicked a stealth bomber's paint job. The high-profile paint job caught on.

"We have a German expression, which says there's nothing written about taste," said Jochen Planer, executive sales director at Carlsson, a German car customization outfit. "It's always evolving." Flat finishes, he believes, are the next step in car design, at least in the European market.

"I think American tastes are still centered around the 'Pimp My Ride' style," Mr. Planer said in reference to the MTV television show, adding American customization tends toward flashier colors and patterns or stripes. Still, orders in the New York market have increased, too, he said.

—William R. Snyder Small-Car Drive

Daimler AG Chief Executive Dieter Zetsche said Tuesday a decision on a small-car alliance is still expected in the first half of this year.

Mr. Zetsche plans to ramp up Daimler's presence in the fiercely competitive segment of compact cars as part of a wider plan to boost annual car sales to 1.5 million by 2015 from 1.13 million cars in 2009.

Daimler is in talks with peers, including France's Renault SA, to forge an alliance on compact cars in a bid to improve the profitability of its smaller vehicles.

Analysts regard the ability to create profits with small cars, which usually have narrower profit margins than larger cars, as crucial for auto makers in coming years due to a broader consumer trend toward smaller and more fuel-efficient vehicles.

Mr. Zetsche said a final decision on an electric car tie-up with BYD Co. should be reached "pretty soon." Daimler announced Monday that it plans to develop an electric vehicle together with BYD to be marketed under a new brand in the Chinese market.

Mr. Zetsche said the car would be targeted at buyers "above BYD's customer base and below Mercedes's customer base. He said Daimler's investment will be "significant," but didn't provide a specific figure.

—Christoph Rauwald

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