http://johnmaxwellonleadership.com/2010/12/20/for-leaders-balancing-care-with-candor/
***************
"Never worry about the size of your Christmas tree. In the eyes of children, they are all 30 feet tall." (Larry Wilde, The Merry Book of Christmas)
***************
As we approach Christmas and the end of 2010, a little bit of John Maxwell is something we'd like to share.
His thoughts on "care" and "candor" as they relate to leadership:
^Care without candor creates dysfunctional relationships
^Candor without care creates distant relationships
^But care balanced with candor creates developing relationships
Maxwell goes on to be specific about how this combination should work:
+Caring values the person while candor values the person's potential
+Caring establishes the relationship while candor expands the relationship
+Caring defines the relationship while candor directs the relationship (getting the team moving together to accomplish a goal is the responsibility of the leader and that often requires candor)
+Caring should never suppress candor while candor should never displace caring
Maxwell has a "caring candor checklist" for working with people. Before having a candid conversation, can you answer "Yes" to the following questions about leading a team:
Have I invested in the relationship enough to be candid with them?
Do I truly value them as people?
Am I sure this is their issue and not mine?
Am I sure I'm not speaking up because I feel threatened?
Is the issue more important than the relationship?
Does this conversation clearly serve their interests and not just mine?
Am I willing to invest time and energy to help them change?
Am I willing to show them how to do something, not just say what's wrong?
Am I willing and able to set clear, specific expectations?
An answer of "Yes" to all of these questions means you have a good chance of communicating effectively.
***************
We'll close our postings for this year here. Merry Christmas and Happy New Year for those who celebrate that way. The happiest of holiday seasons to everyone.
In this first year of the second decade of the 21st century, it's hard to believe we've posted 110 times on all sorts of business and economic issues. As long as there's an audience, we'll continue.
Be well.
Wednesday, December 22, 2010
Home Sales
http://www.nytimes.com/2010/12/23/business/economy/23econ.html?emc=eta1
***************
"It's not enough to be busy. The question is, 'What are we busy about?'" (Henry David Thoreau)
***************
In our 12/15 "Positive" post, we pointed out that there was some good news about the economy: the current Business Roundtable CEO survey reported 45% of those CEOs plan to hire over the next 6 months (the highest percentage from that group in 8 years). And, 60% of those CEOs plan to boost capital spending which is critical to job growth. As we pointed out on 12/15, this is the same group that told Fareed Zakaria earlier this year that they were holding back on capital spending because they were unsure of the regulatory and tax environment.
Since 12/15, Mark Zandi (someone we watch and Congress listens to) has weighed in with his revised forecast on GDP growth in 2011: 3.9% (up from his original 2.8%). The Conference Board's "index of leading indicators" showed movement upward in 9 of its 10 categories for November. Only sluggish building permits pulled down the measure.
So, the "canary in the coal mine" is home sales. Today's report that sales of existing homes climbed in November but missed forecasts is mixed news. The National Association of Realtors (NAR) reports that sales of homes rose 5.6% to a seasonally adjusted annual rate of 4.68 million in November (from about 4.43 million in October). An NAR spokesman concluded that this sector of the economy is "... underperforming, given the size of the population." The NAR position is that home sales should be over 5 million now. Their prediction is that home sales will be at 5.12 million for 2011.
This gets back to "employment." The Roundtable report on CEOs unlocking capital spending will be a boost to employment (up until now, the only capital being spent was sent to Larry Ellison so Oracle could sell productivity improvement software that slowed the need for more hiring).
The NAR's "housing affordability index" shows home prices are where they need to be: families earning a median income of $62,141 needed only to devote (in October) 13.6% of gross income (the lowest amount since calculations were started in 1970) to principal and interest on a median priced single family home.
So, home prices are low relative to incomes. We'll see what happens next.
***************
"It's not enough to be busy. The question is, 'What are we busy about?'" (Henry David Thoreau)
***************
In our 12/15 "Positive" post, we pointed out that there was some good news about the economy: the current Business Roundtable CEO survey reported 45% of those CEOs plan to hire over the next 6 months (the highest percentage from that group in 8 years). And, 60% of those CEOs plan to boost capital spending which is critical to job growth. As we pointed out on 12/15, this is the same group that told Fareed Zakaria earlier this year that they were holding back on capital spending because they were unsure of the regulatory and tax environment.
Since 12/15, Mark Zandi (someone we watch and Congress listens to) has weighed in with his revised forecast on GDP growth in 2011: 3.9% (up from his original 2.8%). The Conference Board's "index of leading indicators" showed movement upward in 9 of its 10 categories for November. Only sluggish building permits pulled down the measure.
So, the "canary in the coal mine" is home sales. Today's report that sales of existing homes climbed in November but missed forecasts is mixed news. The National Association of Realtors (NAR) reports that sales of homes rose 5.6% to a seasonally adjusted annual rate of 4.68 million in November (from about 4.43 million in October). An NAR spokesman concluded that this sector of the economy is "... underperforming, given the size of the population." The NAR position is that home sales should be over 5 million now. Their prediction is that home sales will be at 5.12 million for 2011.
This gets back to "employment." The Roundtable report on CEOs unlocking capital spending will be a boost to employment (up until now, the only capital being spent was sent to Larry Ellison so Oracle could sell productivity improvement software that slowed the need for more hiring).
The NAR's "housing affordability index" shows home prices are where they need to be: families earning a median income of $62,141 needed only to devote (in October) 13.6% of gross income (the lowest amount since calculations were started in 1970) to principal and interest on a median priced single family home.
So, home prices are low relative to incomes. We'll see what happens next.
Tuesday, December 21, 2010
308,745,538: The American Demographic
http://www.msnbc.msn.com/id/40764172/ns/us_news-life/?GT1=43001#
***************
"Whatever the mind can conceive and believe, the mind can achieve." (Dr. Napoleon Hill)
***************
The 2010 official population of the United States was released today by the Census Bureau. The new number (see title above), based on surveys taken on April 1, 2010 (would that be "April Fools Day?"), is a 9.7% increase over the last census: 281.4 million residents in 2000.
The growth in population over the last 10 years is the lowest since the 1940 census (which covered the Great Depression's prior 10 years when growth was only 7.3%).
These are the figures that will be used to reapportion the 435 House seats among the 50 states.
The U.S. is still growing quickly relative to other developed nations. The population of France and England grew 5% over the past decade, while Japan's number has hardly changed and Germany's population is declining. China grew at 6% and Canada at 10%.
The declining growth rate since 2000 in the U.S. is due partly to the meltdown in 2008 which brought births and illegal immigration to a near standstill compared with previous years. The state that gained the most numerically in 2010 was Texas (up 4,293,741 to 25,145,561). Politically, Texas will gain four House seats due to a growing Hispanic population and a diversified economy that held up relatively well during the recession.
Given all of this, Joel Kotkin ("The Changing Demographics of America," The Smithsonian, 8/10) sees an America that grows to somewhere between 404 (United Nations estimate) and 422/458 million (U.S. Census estimate) by 2050. Kotkin, author of "The Next 100 Million - America in 2050," (Penguin Press, 2010) sees America's fertility rate (2.1 children per family in 2006 - the highest in 45 years) as the key to its growth by 2050. This is a rate helped mostly by recent immigrants who tend to have higher birth rates than residents whose families have been here for several generations. Further, the U.S. minority population, currently 30%, is expected to exceed 50% before 2050. By 2039, due largely to immigrants and their offspring, the majority of working-age Americans will be "minorities."
Again, according to Kotkin, between 2000 and 2050, the U.S. 15-to-64 age group is expected to grow 42%. This same group is expected to decline 10% in China, 25% in Europe, 30% in South Korea and more than 40% in Japan.
So, today's census figures tell us where we are. Kotkin's insightful worldwide demographic perspectives tell us where we're headed: "Only successful immigration can provide the markets, the manpower and, perhaps most important, the youthful energy to keep western societies vital and growing." (Joel Kotkin, 2010)
***************
"Whatever the mind can conceive and believe, the mind can achieve." (Dr. Napoleon Hill)
***************
The 2010 official population of the United States was released today by the Census Bureau. The new number (see title above), based on surveys taken on April 1, 2010 (would that be "April Fools Day?"), is a 9.7% increase over the last census: 281.4 million residents in 2000.
The growth in population over the last 10 years is the lowest since the 1940 census (which covered the Great Depression's prior 10 years when growth was only 7.3%).
These are the figures that will be used to reapportion the 435 House seats among the 50 states.
The U.S. is still growing quickly relative to other developed nations. The population of France and England grew 5% over the past decade, while Japan's number has hardly changed and Germany's population is declining. China grew at 6% and Canada at 10%.
The declining growth rate since 2000 in the U.S. is due partly to the meltdown in 2008 which brought births and illegal immigration to a near standstill compared with previous years. The state that gained the most numerically in 2010 was Texas (up 4,293,741 to 25,145,561). Politically, Texas will gain four House seats due to a growing Hispanic population and a diversified economy that held up relatively well during the recession.
Given all of this, Joel Kotkin ("The Changing Demographics of America," The Smithsonian, 8/10) sees an America that grows to somewhere between 404 (United Nations estimate) and 422/458 million (U.S. Census estimate) by 2050. Kotkin, author of "The Next 100 Million - America in 2050," (Penguin Press, 2010) sees America's fertility rate (2.1 children per family in 2006 - the highest in 45 years) as the key to its growth by 2050. This is a rate helped mostly by recent immigrants who tend to have higher birth rates than residents whose families have been here for several generations. Further, the U.S. minority population, currently 30%, is expected to exceed 50% before 2050. By 2039, due largely to immigrants and their offspring, the majority of working-age Americans will be "minorities."
Again, according to Kotkin, between 2000 and 2050, the U.S. 15-to-64 age group is expected to grow 42%. This same group is expected to decline 10% in China, 25% in Europe, 30% in South Korea and more than 40% in Japan.
So, today's census figures tell us where we are. Kotkin's insightful worldwide demographic perspectives tell us where we're headed: "Only successful immigration can provide the markets, the manpower and, perhaps most important, the youthful energy to keep western societies vital and growing." (Joel Kotkin, 2010)
Friday, December 17, 2010
A Teachable Moment
http://www.nytimes.com/2010/12/17/opinion/17krugman.html?_r=1&src=ISMR_HP_LO_MST_FB
Paul Krugman, who sometimes politicizes too much for me, provides us with a perspective this week that answers some questions many of us have on what's being learned about why the worldwide financial crisis happened in the first place. In his words, this should be a "teachable moment."
Nouriel Roubini's book (co-written with Stephen Mihm), "Crisis Economics" is the best book written on the subject of what happened, why it happened and what could happen in the future.
Back to Krugman: the Financial Crisis Inquiry Commission was established by law to "...examine the causes, domestic and global, of the financial ... crisis in the U.S."
However; the commission has broken down along partisan lines, unable to agree on some of the most basic points.
If we've read anything intelligent about the crisis (Roubini, or elsewhere), we know what happened and we don't want it to happen again. Krugman points out that the four Republican members of the commission "... voted to exclude the following terms from the report: deregulation, shadow banking, interconnection, and even Wall Street."
When Democratic members of the commission refused to go along with this, the Republicans issued their own report which didn't use any of the "banned" terms. The Republican story is that the crisis was the fault of "government do-gooders." This would include government-sponsored loan-guarantee agencies.
We won't dignify the extent of the Republican scenario but we find ourselves disappointed that, even on an issue as serious as this one, both sides can't agree on a single narrative about what happened and why it needs to not happen again. And, this is just Congress "defining" it! Dodd-Frank is the law created to deal with the issues.
Krugman is basically saying that the Republicans are just carrying the water for the Conservative approach that absolves the banks of any wrongdoing.
We don't like to talk about politics here but we have to occasionally bow to Krugman's judgment that there aren't any real bi-partisan approaches in today's politics. So, those of us who grew up being told that we have a pluralistic society and that that was "good" because everybody gets represented, find that things don't work the way they were supposed to and that's bad for business, regulation and the economy overall.
So, as Krugman says, the "teachable moment" from the crisis is that when an ideology backed by vast wealth and immense power confronts inconvenient facts, "the facts lose."
Paul Krugman, who sometimes politicizes too much for me, provides us with a perspective this week that answers some questions many of us have on what's being learned about why the worldwide financial crisis happened in the first place. In his words, this should be a "teachable moment."
Nouriel Roubini's book (co-written with Stephen Mihm), "Crisis Economics" is the best book written on the subject of what happened, why it happened and what could happen in the future.
Back to Krugman: the Financial Crisis Inquiry Commission was established by law to "...examine the causes, domestic and global, of the financial ... crisis in the U.S."
However; the commission has broken down along partisan lines, unable to agree on some of the most basic points.
If we've read anything intelligent about the crisis (Roubini, or elsewhere), we know what happened and we don't want it to happen again. Krugman points out that the four Republican members of the commission "... voted to exclude the following terms from the report: deregulation, shadow banking, interconnection, and even Wall Street."
When Democratic members of the commission refused to go along with this, the Republicans issued their own report which didn't use any of the "banned" terms. The Republican story is that the crisis was the fault of "government do-gooders." This would include government-sponsored loan-guarantee agencies.
We won't dignify the extent of the Republican scenario but we find ourselves disappointed that, even on an issue as serious as this one, both sides can't agree on a single narrative about what happened and why it needs to not happen again. And, this is just Congress "defining" it! Dodd-Frank is the law created to deal with the issues.
Krugman is basically saying that the Republicans are just carrying the water for the Conservative approach that absolves the banks of any wrongdoing.
We don't like to talk about politics here but we have to occasionally bow to Krugman's judgment that there aren't any real bi-partisan approaches in today's politics. So, those of us who grew up being told that we have a pluralistic society and that that was "good" because everybody gets represented, find that things don't work the way they were supposed to and that's bad for business, regulation and the economy overall.
So, as Krugman says, the "teachable moment" from the crisis is that when an ideology backed by vast wealth and immense power confronts inconvenient facts, "the facts lose."
Wednesday, December 15, 2010
Positive Economic News
http://economix.blogs.nytimes.com/2010/12/14/three-good-economic-reports/?emc=eta1
***************
"Thinking is one thing no one has ever been able to tax." (Charles Kettering)
***************
Something positive is happening out there with the economy. Whether it's the Fed, the tax break "deal," or capital spending starting to leak out into markets, the "Business Roundtable" study released yesterday implies economic improvement now.
The Business Roundtable is made up of the CEOs of the largest Top 500 companies and has, over the past 50 years been at it's most powerful when advocating that the U.S. government act on issues of import.
The Roundtable released their current CEO survey yesterday with one of its most impressive findings indicating that 45% of those CEOs plan to hire within the next six months. That's the highest percentage from that group in 8 years.
60% of those CEOs plan to bump up capital spending and 80% expect sales growth.
This is the same group that told Fareed Zakaria at the beginning of 2010 that they were "holding back" capital spending because they were unsure of the regulatory and tax environment.
In addition, yesterday brought 3 other positive reports:
(1) Retail sales rose for the fifth consecutive month in November (with the October and September figures revised up sharply);
(2) The National Federation of Independent Business's small business optimism index also rose for the fourth consecutive month (and this is where most of the hiring takes place);
(3) The producer price index also increased more than expected, lessening concerns about "deflation."
Macroeconomic Advisers yesterday raised its forecast for gross domestic product growth in the fourth quarter to an annual rate of 3%. Credit Suisse raised it's fourth quarter GDP growth forecast a full percent from 2.2% to 3.2%. JP Morgan raised its forecast a full percentage point as well from 2.5% to 3.5%. A full percentage point for the quarter that we're in is significant.
According to one Deutsche Bank economist, employers have stretched the workweek for existing workers to its limit and now must add additional employees. Assuming productivity slows to levels consistent with the last four "recoveries," the U.S. economy could create anywhere from 2.5 to 3.9 million jobs in 2011. Assuming the standard quantitative axiom that it takes 125,000 jobs per month just to account for new entrants into the workforce from population growth (or, 1.5 million total for any new year), this data is still "additive" to the economy. To put that into perspective, the economy added (roughly) 950,000 jobs in 2010.
If one takes the high end of the job creation numbers above, the unemployment rate would be pushed down to 7.3% (from the almost 10% level it sits at now).
Coming out of a recession, it doesn't get any better than this. Let's hope that this positive news continues throughout the holiday season and jump starts 2011.
***************
"Thinking is one thing no one has ever been able to tax." (Charles Kettering)
***************
Something positive is happening out there with the economy. Whether it's the Fed, the tax break "deal," or capital spending starting to leak out into markets, the "Business Roundtable" study released yesterday implies economic improvement now.
The Business Roundtable is made up of the CEOs of the largest Top 500 companies and has, over the past 50 years been at it's most powerful when advocating that the U.S. government act on issues of import.
The Roundtable released their current CEO survey yesterday with one of its most impressive findings indicating that 45% of those CEOs plan to hire within the next six months. That's the highest percentage from that group in 8 years.
60% of those CEOs plan to bump up capital spending and 80% expect sales growth.
This is the same group that told Fareed Zakaria at the beginning of 2010 that they were "holding back" capital spending because they were unsure of the regulatory and tax environment.
In addition, yesterday brought 3 other positive reports:
(1) Retail sales rose for the fifth consecutive month in November (with the October and September figures revised up sharply);
(2) The National Federation of Independent Business's small business optimism index also rose for the fourth consecutive month (and this is where most of the hiring takes place);
(3) The producer price index also increased more than expected, lessening concerns about "deflation."
Macroeconomic Advisers yesterday raised its forecast for gross domestic product growth in the fourth quarter to an annual rate of 3%. Credit Suisse raised it's fourth quarter GDP growth forecast a full percent from 2.2% to 3.2%. JP Morgan raised its forecast a full percentage point as well from 2.5% to 3.5%. A full percentage point for the quarter that we're in is significant.
According to one Deutsche Bank economist, employers have stretched the workweek for existing workers to its limit and now must add additional employees. Assuming productivity slows to levels consistent with the last four "recoveries," the U.S. economy could create anywhere from 2.5 to 3.9 million jobs in 2011. Assuming the standard quantitative axiom that it takes 125,000 jobs per month just to account for new entrants into the workforce from population growth (or, 1.5 million total for any new year), this data is still "additive" to the economy. To put that into perspective, the economy added (roughly) 950,000 jobs in 2010.
If one takes the high end of the job creation numbers above, the unemployment rate would be pushed down to 7.3% (from the almost 10% level it sits at now).
Coming out of a recession, it doesn't get any better than this. Let's hope that this positive news continues throughout the holiday season and jump starts 2011.
Saturday, December 11, 2010
China's Inflation - Toyota's Challenges
http://www.nytimes.com/2010/12/11/business/global/11inflation.html?emc=eta1
***************
"Professional psychiatrists in China are like pandas. There are only a few thousand of us." (Zhang Yalin, Assistant Director - Mental Research Institute - Central South University - China)
***************
China's consumer price index rose 5.1% in November. That's the highest in 28 months. This is way above the government's target level of 3%.
The rise was attributed to food prices which are up 11%.
China's central bank order for all commercial banks to increase minimum reserves by 0.5% of deposits was the third such directive in the last five weeks. It comes as Beijing tries to rein in a flood of money flowing through the economy from stimulus spending and bank lending that helped China rebound quickly from the worlwide financial crisis.
The government has also instituted price controls and released food reserves in agricultural areas hoping that food prices won't spike anymore.
While China's economy is still growing at 9% (9.6% GDP growth for the 3 months ending in September, down from a post-crisis high of 11.9% in the first quarter), the measures that the government is taking to slow inflation could also "slow" the economy. That, in turn, could increase unemployment.
No matter what the situation, we see it as difficult to manage such a high rate of GDP growth in a sustained way. Mathematically, it's impossible to continue compound growth at 9% for anything. When it's an "economy," there are too many factors at play to have any level of "smoothness."
Therein lies the rub: a subtraction of 1% in GDP growth (below 9%) in China means 22 million people are unemployed.
Speaking of problems, Toyota is continuing to have problems as sales slump and inventories go up even for the Camry and the Prius. Consumers are demanding larger discounts to remain loyal. Toyota is up to 11 million recalls worldwide over the past year. Last week, Toyota recalled 650,000 Priuses to fix "cooling pumps." While industry sales rose 17% last month, Toyota's sales fell 3.3%.
In November, Toyota spent an average of $2,602 per car on incentives, 37% more than a year ago.
While Toyota's troubles can be traced to a variety of sources - recalls, market trends, etc. - many stem simply from an aging product line.
Ed Tonkin, a multi-franchise dealer in Portland, Oregon was recently quoted as saying that the Hyundai Sonata has been a real in-your-face example of how the competition is better.
Before anything can be turned around, the negative slide needs to be stopped. With Toyota, that slide appears to be longer than people originally thought.
***************
"Professional psychiatrists in China are like pandas. There are only a few thousand of us." (Zhang Yalin, Assistant Director - Mental Research Institute - Central South University - China)
***************
China's consumer price index rose 5.1% in November. That's the highest in 28 months. This is way above the government's target level of 3%.
The rise was attributed to food prices which are up 11%.
China's central bank order for all commercial banks to increase minimum reserves by 0.5% of deposits was the third such directive in the last five weeks. It comes as Beijing tries to rein in a flood of money flowing through the economy from stimulus spending and bank lending that helped China rebound quickly from the worlwide financial crisis.
The government has also instituted price controls and released food reserves in agricultural areas hoping that food prices won't spike anymore.
While China's economy is still growing at 9% (9.6% GDP growth for the 3 months ending in September, down from a post-crisis high of 11.9% in the first quarter), the measures that the government is taking to slow inflation could also "slow" the economy. That, in turn, could increase unemployment.
No matter what the situation, we see it as difficult to manage such a high rate of GDP growth in a sustained way. Mathematically, it's impossible to continue compound growth at 9% for anything. When it's an "economy," there are too many factors at play to have any level of "smoothness."
Therein lies the rub: a subtraction of 1% in GDP growth (below 9%) in China means 22 million people are unemployed.
Speaking of problems, Toyota is continuing to have problems as sales slump and inventories go up even for the Camry and the Prius. Consumers are demanding larger discounts to remain loyal. Toyota is up to 11 million recalls worldwide over the past year. Last week, Toyota recalled 650,000 Priuses to fix "cooling pumps." While industry sales rose 17% last month, Toyota's sales fell 3.3%.
In November, Toyota spent an average of $2,602 per car on incentives, 37% more than a year ago.
While Toyota's troubles can be traced to a variety of sources - recalls, market trends, etc. - many stem simply from an aging product line.
Ed Tonkin, a multi-franchise dealer in Portland, Oregon was recently quoted as saying that the Hyundai Sonata has been a real in-your-face example of how the competition is better.
Before anything can be turned around, the negative slide needs to be stopped. With Toyota, that slide appears to be longer than people originally thought.
Friday, December 10, 2010
The Nano Breakthrough
http://www.nytimes.com/2010/12/10/business/global/10tata.html?emc=eta1
***************
"Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in public or private life, have been the consequences of action without thought." (Bernard Baruch)
***************
The $2,200 (or $2,500, or $2,900) car that many thought would change everything hasn't changed anything. When the Tata Nano was introduced in early 2009, it was billed as the modern day "people's car."
The price point for the car was considered the right place for those who were looking to move up from the motorized bike or three wheeler. And, of course, as its sales grew in India, it would then take on the rest of the world.
The only problem is that it hasn't taken off in India. The Indian economy is growing at nearly 9% annually while sales of the Nano have been falling for the last four months. Tata Motors has sold (wait for it!) "509" Nanos to its dealers in November. This would be in contrast to the 9,000 Nanos that it delivered in July.
The largest selling car in India for November was the Maruti Suzuki Alto: 30,000 units sold. It's price point: $6,200.
So, is the Nano at the wrong price point?
Analysts have concluded that it may not be sufficient to make cheaper, smaller versions of existing products. Their conclusion: companies need to make sure the products are widely available and are seen as safe, useful and alluring.
There is a booming car market in India that has passed the Nano by. Total auto sales in India climbed more than 22% in November to 203,000 cars. The most popular cars are small, fuel-efficient hatchbacks that sell for $10,000 or less. Maruti Suzuki (a division of Japanese automaker Suzuki) now sells half of all cars sold in India.
Tata, which started as a locomotive and truck maker, has gradually built market share in the car business over the last 20 years on the strength of modestly priced cars and sport utility vehicles. The Nano was Tata's big bid to shake up the car market in India and then go global.
Unfortunately, the Nano was troubled from the start when it's production plans were thrown off by local protests over where they would be constructing the Nano factory. Tata had to relocate the factory to another state, Gujarat - causing it to take more than a year and a half to fill orders for the first 100,000 cars.
More recently, the Nano has been hurt by reports of "fires" in a handful of cars. This has been a problem with the Nano's image, made worse by the company's explanations for the fires which convinced no one.
Logistically, the company has gone from only taking orders for the cars to making them available for immediate purchase in more sites around the country (which they should have done in the first place).
So "safety" (which may not yet be resolved), marketing and sales strategies appear to be in need of polishing. Given that Tata Motors is the same company that bought Jaguar and Land Rover from Ford, we have thoughts that there are the financial resources there to fix these problems. But, one has to ask why the problems occurred in the first place.
We would guess that there are "quality" and vehicle "size" questions that need to be addressed as against the competition which is selling more and larger cars.
We wonder what's next for the Nano.
***************
"Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in public or private life, have been the consequences of action without thought." (Bernard Baruch)
***************
The $2,200 (or $2,500, or $2,900) car that many thought would change everything hasn't changed anything. When the Tata Nano was introduced in early 2009, it was billed as the modern day "people's car."
The price point for the car was considered the right place for those who were looking to move up from the motorized bike or three wheeler. And, of course, as its sales grew in India, it would then take on the rest of the world.
The only problem is that it hasn't taken off in India. The Indian economy is growing at nearly 9% annually while sales of the Nano have been falling for the last four months. Tata Motors has sold (wait for it!) "509" Nanos to its dealers in November. This would be in contrast to the 9,000 Nanos that it delivered in July.
The largest selling car in India for November was the Maruti Suzuki Alto: 30,000 units sold. It's price point: $6,200.
So, is the Nano at the wrong price point?
Analysts have concluded that it may not be sufficient to make cheaper, smaller versions of existing products. Their conclusion: companies need to make sure the products are widely available and are seen as safe, useful and alluring.
There is a booming car market in India that has passed the Nano by. Total auto sales in India climbed more than 22% in November to 203,000 cars. The most popular cars are small, fuel-efficient hatchbacks that sell for $10,000 or less. Maruti Suzuki (a division of Japanese automaker Suzuki) now sells half of all cars sold in India.
Tata, which started as a locomotive and truck maker, has gradually built market share in the car business over the last 20 years on the strength of modestly priced cars and sport utility vehicles. The Nano was Tata's big bid to shake up the car market in India and then go global.
Unfortunately, the Nano was troubled from the start when it's production plans were thrown off by local protests over where they would be constructing the Nano factory. Tata had to relocate the factory to another state, Gujarat - causing it to take more than a year and a half to fill orders for the first 100,000 cars.
More recently, the Nano has been hurt by reports of "fires" in a handful of cars. This has been a problem with the Nano's image, made worse by the company's explanations for the fires which convinced no one.
Logistically, the company has gone from only taking orders for the cars to making them available for immediate purchase in more sites around the country (which they should have done in the first place).
So "safety" (which may not yet be resolved), marketing and sales strategies appear to be in need of polishing. Given that Tata Motors is the same company that bought Jaguar and Land Rover from Ford, we have thoughts that there are the financial resources there to fix these problems. But, one has to ask why the problems occurred in the first place.
We would guess that there are "quality" and vehicle "size" questions that need to be addressed as against the competition which is selling more and larger cars.
We wonder what's next for the Nano.
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