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|India arrives as a manufacturing superpower|
Corriere della Sera - January 15th 2008
Lakes full of ink have been spilled about the unveiling in
Since the turn of the century, analysis of the economic rise of
What the Tata Nano shows, however, is that this is out of date. It is history.
But that is now changing. Roads are at last being built. Sea-ports have been modernised, using private management and investment. Airports are being privatised and rebuilt. Domestic consumption, and so local demand for manufactures, is growing rapidly. As a result, Indian manufacturing output has been growing faster than services in each of the past two years.
The car industry will be at the heart of Indian manufacturing growth during the next decade. Global firms are investing there: last week, Ford announced a $500m investment in car-making in
Tata Motors is top of that list. The design and manufacturing achievement represented by the Tata Nano should not be underestimated. It is half the price of its closest existing rival in the Indian market, which is made by a joint venture between Maruti of India and Suzuki of Japan. Like the Ford Model T and the Fiat 500, it will make sense only if it is produced in very large quantities, as a mass-market car, which will also mean that Tata will need to export in order to build up its scale of production.
At the same time, Tata Motors is negotiating to buy two luxury car brands: Land Rover and Jaguar, both famous British names currently owned by Ford. So, all of a sudden, the world will have a new car-maker, competing in all segments of the market, from ultra-cheap to luxury. That will also stimulate Indian investment in all the other industries associated with cars, including components, design, steel and road-building itself.
Much of the time, 2008 will look like being the year of