Business: Tata's cheap car who's risking the most.

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posted by ushma 1766 days ago
The sales of the good old maruti 800 just keeps falling each month ,this month it has just sold 6214 units.Initially yes the 1 Lakh car will have more than a few takers but is it sustainable in the long run and if there is too much competition[renault,other manufacturers] it could actually do more harm than good.Even with the 1 lakh car I doubt that every two wheeler owner will switch over so is there such a big market actually in the lowest segment. Brings up the question as to would it be worth risking for most component manufacturers who are betting big time on volumes.For a powerful house like tata there would not be much of a financial crisis but these suppliers need huge volumes if they are to make any profit from the 1 lakh car. Could be Something like the cheap airline business where they end up in the red and finally have to consolidate[be bought over by a larger group]for these suppliers. This 1 lakh car is a bigger risk for the suppliers than the TATA group.
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