It's just a car....

Mira Kamdar writes in the Post that the new $2,500 Tata Nano is the end of Western Civilization as we know it:

Still, by putting distribution in the hands of its dealers, taking advantage of cheap Indian labor and using lower-cost materials, Tata Motors has driven the price of a car down to levels never seen before.

This is good news for the millions of people in the developing world who never imagined that they could own their own car. But it's a problem for the rest of us.

It's a problem for Detroit, which is racing to enter India's booming small-car market but will now have to completely revolutionize its production and distribution to compete. It's a problem for America's beleaguered auto workers, who will become even more expendable as Detroit moves its manufacturing efforts to India and other Asian countries. And it's a potentially gigantic problem for the environment. India's urban roadways are already choked with traffic, and the air quality of its major cities is ghastly. If millions of Indians and Chinese get to have their own cars, the planet is doomed. Suddenly, the cute little Nano starts to look a lot less winning.

Read the whole thing...

Kadmar's view of the Tata Nano is.....myopic at best. We have here an Indian company using Indian capital and Indian workers to build a car mainly for consumers in India. Ratan Tata is making good use of the resources and the economic environment available to him and his company, in order to make a product that is affordable to the consumers of India. It's good for India and good for his business. I'm not exactly sure how anybody could spin this as a bad thing for India and its economy.

Kadmar's other arguments are seemingly superfluous. Environmental issues will probably be improved, not degraded, as Indians buy new Nano's to replace aging inefficient western imports. And Kadmar's arguments about the impact on Detroit really have no impact on what Tata and his company are doing. Let's face it, the Detroit model for producing cars has been outdated for decades as the Big Three have been saddled by the higher costs of doing business, their inability to break free of their current corporate model, and being saddled with burdensome union contracts and costs.

Kadmar writes:

In one of globalization's supreme ironies, cash-rich Indian companies are snapping up the brands and companies left behind by the mad rush to profit from Asia's billions. The two top contenders to buy Range Rover and Jaguar from Ford? India's Mahindra & Mahindra and Tata Motors. Surely we are at a turning point when an Indian company -- in just one week -- unveils a car so cheap that U.S. manufacturers simply can't compete, for a market they've never tried to tap, and emerges as the likely buyer of two of the world's most expensive luxury brands owned by that most iconic of U.S. companies, Ford. And surely the glow of the American century is beginning to dim.

Or is it the beginning of a new American century? Is this going to be something that reinvigorates the American car market? Will the emergence of Indian companies as players on the global auto market finally force Ford, GM, and Chrysler to change their business model? And if all of those things do happen, their business model changes, and the companies expand their market share, does that not make the emergency of the Nano a net positive thing for America?

Kandar seems to think that economies should never change and that markets are a zero-sum game; that the success of car companies in India automatically means doom and gloom for Detroit. One merely needs to look around at all of the redundant businesses here in the U.S. to see that many times competition, even on the micro scale, is a tide that will lift all boats. The most important things to glean from the story of the Tata Nano is that the Indian economy is doing good things to produce good products for their home consumers, and that Detroit really needs to take a look at itself in order to compete in the 21st century. And that's really all you need to know about the Tata.

Besides....it's just a car.