Awaiting the Great Nano Flood of 2010

Potential consumer segments and its conversion to Nano market

Last year Bihar faced flood that it hadn’t seen for fifty years and no one had any clue as what measure would be required to curtail it. yesterday Tata motors launched it people car- nano, which will be available to public by mid this year. Government, public & private institutions seem to be unaware and under-prepared for the NANO flood, which will grip the nation 2010 onwards.

Though nano potential market in India has been sized by many investment firms, but as the product itself is evolutionary, so will evolve its customers. In a country where public transportation has been never been emphasized on the potential is enormous. India young population is filled with such potential, we at the potential buyers which will come into being once Nano hits the market.

Nano is most likely to emerge as second car of choice for the family, where even housewives would demand, from grocery shopping to mall shopping, Nano is going to emerge as the transporting alternative for shopping escapades of upper-class Indian housewives and middle-class families which have long been waiting for second cheap alternative.
A large number of collage going crowd which till now ply on two-wheeler ranging from Rs 50,000 to 1Lac. Soon, a large number of them would be turning towards Nano, this conversion would further flood not only the road but already cramped educational institutions, which may have to invest in parking lots than on labs.

Semi-urban areas are another two-wheeler bastion, which will get dismantled by introduction of Nano car. More are more people are likely to dump three-wheeler autos and expensive SUVs for tata nano, which for some-time will have smooth run in the narrow lanes of small cities. But,

Personal Computers Manufacturers Facing Tough Market Scenario

Personal Computer market in India is facing tough times as the Q3 FY09 sales have dropped by 19% and market is expected to remain muted with no growth for overall FY09.

Personal computer sales for the period Oct-Dec 2008 stood at 1.4mn units down from the 1.7mn units a year ago. Amongst the personal computers desktops witnessed decline of 15% while sales of notebooks declined by 30%. Desktops constitute 70% of the total personal computer market and remaining is held by notebooks. Branded desktops player constitute over 60% of 5.1mn unit desktop computer market in India.

Consumption of personal computers in Oct-Dec quarter was largely led by sectors such as Telecom, Banking, education and e-governance requirement of central and state governments. But, declining demand was witnessed from sectors such as Retail, IT and SME sectors.

As large percentage of hardware component is imported, rising rupee has deteriorated the margins of personal computer manufacturers. MNC biggies such as HP and Lenovo together with Indian major HCL constitute almost half of the desktop market in India, and are facing pricing issues.

Personal computer manufacturers are expected to face rough ride ahead as economic downturn has already affected the individual demand for personal computers, corporates on the other hand are trimming not only expenditure on IT hardware but due to low capex spending in the near future they have restrained the demand for personal computers.

Non-Planned Expenditure for a Successful Political Gambit

UPA is in full swing of unveiling pre-election sops to the people. It first went to declare Rs 30,000 crore tax deductions, which is loss to revenue receipts. Then government announced increased in dearness allowance of Central government employees. A few days before this announcement, UPA was playing parliamentary morality card for not having long-term mandate to fight recession in pre-election time frame.

This is the second time in the row that UPA government is dolling out sops which it claims is part of government’s economic agenda. But, at the same instance it fails to include all such economic programs under budget. Last year every one in the government played itself as pro-farmer but when it came to budgeting it such huge expense government just forgot it as part of budgetary expenditure. A lot of such programs were put under non-planned expenditure out of budgetary provision to make budget look good. This year to government has played the same card by announcing economic sops, which are not part of budget.

UPA Government wants common population to aware only of the populist economic measure but it does not want the people to know the cost, which it will have to pay it in future. It is smartly widening the budget deficit for which it does not want to be held accountable in future.

A few weeks after the budget announcement, government has forgotten its parliamentary principals to announce massive plans to largely rope in voters then to effectively tackle the grim economic scenario. Government’s bet on cutting may not be entirely fruitful if industry does not pass on this cut to the consumers, which has often happened in the past. Pre-election sops are not always successful; a lot depends on underlying economic scenario.