NANO or No! No!

From the specs and the reviews that I have been reading and watching, Tata Nano appears to be a nice car (at the given pricing). I must say that I'm impressed, as are so many other Indians and people around the world. But if I see through the strategy of Tata Motors for selling the car (Nano), I'm a bit perturbed. The booking amount is not Rs.2,999/- but ranges from Rs.95,000/- to Rs.1,40,000/-. You pay Rs.2,999/- only when you want to get the vehicle financed (and the balance booking amount would be paid by the financing institution). Ever heard making 70% payment for booking a car? Other auto companies book a car for you for as low as Rs.1,000/-, then why is Tata Motors asking you to cough up such a huge advance payment?

We are all aware that Tata Motors is in a financial havoc. Thanks to its acquisition of JLR, the dwindling automobile demand globally, and a failed Rights Issue in the Indian Capital Markets to raise funds, Tata Motors is in desperate need of cash to meet its interest obligations and working capital requirements. Nano seems to be the last ray of hope for Tata Motors to raise cash in this recessionary global scenario. Tata Motors has decided to sell the Nano to randomly chosen 1 lakh customers, which implies raising anything ranging between Rs.950 million to Rs. 1400 million (this is only the amount raised from one lakh customers who would be getting the cars, the other who do not get the cars would get the refund after 120 days from the end of the booking period, so the interest free funds available for this period of 4 months would provide additional working capital). The amount raised fro the sale of application forms (Rs.300 each), assuming 2 lakh forms are sold, would add another 60 million to the kitty. This, Tata Motor assumes would solve all their impending problems.

But would this last ray of hope bring sunlight to Tata Motors? Is the Indian 'aam aadmi' willing to pay Rupees ONE LAKH as an advance booking amount? Would there be ONE LAKH such people? The date of delivery of the car is also uncertain - the deliveries would start from July 2009, but would be completed by the end of March 2010. Would the applicants be paid interest on the booking amount in case the cars are not delivered to them in July itself? The questions are yet to be answered by Tata Motors...

From my little understanding of how the Indian consumers behave, all that I can say is that they always prefer to make a low initial payment to own any asset. That, I believe, was the reason for the instant success of Reliance India Mobile (just Rs. 500 for a cell phone). Is the Rs.2,999 financing scheme trying to answer that? Would the Indian consumers be able to look through thsi gimmick? Would booking a Nano now be a rational decision? No idea! All that I can say is that we have behaved irrationally, sometime or the other in our lives! Lets wait and watch, how the 'aam aadmi' behaves this time!

Merrill Lynch's Outlook 2009!

"An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today." - Laurence J. Peter (1919 - 1988)

It was strange to see a new banner on the homepage of Merrill Lynch's website (http://www.ml.com) captioned 'OUTLOOK 2009 - What's Next for the Markets & the Economy - Merrill Lynch's annual look at the year ahead offers expert insights and actionable investment ideas to help you manage today's markets and prepare for better times ahead."

Should I call it ridiculous? ML was not able to provide itself with a realistic outlook of its own financial position and risk management efficiency, and it is now trying to predict how the global markets would be in the year ahead. How many people are going to swallow it?

No doubt, ML has now been acquired by Bank of America, but I still feel that the confidence which has been lost would take a lot of time to be rebuilt. The current global situation has further deteriorated the investor confidence and the wounds would take a long time to heal.

All I can believe that this must be exercise to rebuild confidence in the market about the efficiency of research provided by ML and they have been rather more conservative (and at times a bit balanced with a bit of optimism to ensure that the investors keep investing in the market) in their predictions now so that taking refuge at a later point in time would become easier. Moreover, if the conservative outlook of ML somehow works out in the months to come, ML can surely boast of its research efficiency. All of us, however, genuinely hope that ML's pessimistic outlook doesn't turn out to be true!

Meter Down!

From my experience of living in Mumbai, I can confidently say that at least 6 out of every 10 taxi and auto-rickshaw fare meters in Mumbai appear to be tampered. Of course, the degree of tampering varies, some just with a minor tweak to show a 5-10% variation in fare and some tweaked to the degree of over 100%. How can you get a fare variation of around 30% when you travel the same distance in almost similar traffic conditions each day? It is quite possible in Mumbai, thanks to the tampered taxi and auto meters.

My first experience of being a victim to the tampered meters began in April 2007 when I had come to Mumbai for my summer internship. I used to board a rick from Bandra Station to come to Bandra Kurla Complex (BKC). The variation in fare used to range from Rs.18 to Rs.28. Sounds paltry, but it is not. In such a short distance, the variation under almost similar traffic conditions was almost as high as 50%. had you boarded a rick with a tampered meter for a longer distance, you would have paid almost one and a half times the actual fare, say instead of Rs.100, you would be required to pay Rs.150. 

Sometimes, on scolding and rebuking the rick driver, they used to make a concession....but that happened only sometimes. Most of the times you do not bother to haggle early in the morning before starting your day at work.

Thereafter, I came to Mumbai (for an almost permanent settlement) in June 2008 and the first experience of boarding a cab on a rainy morning from Lokmanya Tilak Terminus (LTT) to Hiranandani Gardens in Powai was a bitter one to start a new life in Mumbai. The fare which I was supposed to pay as per the meter and the rate card was a whooping Rs. 360 and the driver said that he would charge an additional Rs.100 for the luggage which he had to load on the carrier of the cab. He offered me a discount of Rs.10 and asked me to pay a rounded off sum of Rs.450. I do not really know whether the meter was tampered or the rate card which he showed was fake (many a times, cab drivers keep a fake rate card which shows an inflated fare and the passengers are taken for a RIDE). Almost drenched, I was fuming with heat and anger. From whatever little knowledge I had of Mumbai from my previous visits and whatever info I had gathered from surfing the net, the fare should not have been more than Rs.140 in any case. Finally, after a heated argument and a lot of haggling, I paid Rs.250 as a final settlement.

Thereafter, I started traveling by rick from Powai to BKC (via Andheri-Kurla Road), a distance of approx. 10.2 kms and the fare varied from Rs.52 to Rs.90, sometimes due to traffic conditions and most of the times due to tampered meters. I thought to myself, should I start haggling everyday? Unfortunately, I couldn't! 

After a couple of months I got a car and did not prefer to travel by a rick or a cab any longer. But you cannot isolate yourself from public transport facilities completely, especially when you live in a city like Mumbai.

Another encounter with a tampered cab meter of mine finally took place on January 27, 2009 (around 1 am in the morning while I was coming from LTT to Powai. The fare which I was asked to pay using the mid-night chart was Rs. 274.50. While going from Powai to LTT via the same route during day time in comparatively more adverse traffic conditions, I had paid Rs. 89 as the fare. Even adding a premium of 25% for mid-night fare, I should not have been paying more than Rs.125. Also, from my experience of traveling in Mumbai, the cab fare from CST to Powai is around Rs.180, how should I pay Rs.275 in this case?

I thought to myself that there has to be an end to paying inflated fares...so, I finally decided to take the taxi driver to the nearest local police station and settle the case. Initially, the driver thought I was kidding. But when he realised that I was serious, he was willing to come to terms and finally I settled at Rs. 150. I did not want to close the matter here...I was infuriated...How long can we be victimised like this? I finally decided that I should lodge a complaint for this taxi so I started googling for more information about the procedures to lodge the complaint. Thankfully, I have this uncanny habit of noting down taxi and auto registration numbers before boarding them. I lodged a complaint on the website of the Mumbai Traffic Police (http://www.trafficpolicemumbai.org/Complaintform.htm) not really expecting much action, but with a hope (as said, "Ummed pe to duniya kayam hai") that maybe I should at least apprise them (Mumbai Traffic Police) of the common problem which I have faced so many times and which every Mumbaikar faces almost every other day. Fortunately, the Mumbai Traffic Police has sent me an email that they have forwarded my complaint to RTO Wadala where the taxi has been registered and have intimated RTO Wadala to keep me updated of the action being taken in the said matter. RTO Wadala has also sent me an email stating that action has been initiated for my complaint. I hope to receive subsequent communication too, regarding what action has been taken. Thanks, Mumbai Traffic Police.

Lesson 1 - DO NOT TRUST ANYONE! (I've still not completely imbibed this lesson though, but my subsequent experiences keep reinforcing this lesson).

Lesson 2 - Not just the meters can be tampered, but the tariff /rate chart/ card for taxis can also be a fake one with inflated figures. So, it is always advisable that you carry a copy of the tariff card with yourself if you regularly travel in cabs. You may download the tariff card from the following link: http://www.trafficpolicemumbai.org/Taxi%20Tariff%20card.pdf. I have formatted and printed a miniature copy for myself which I carry in my wallet.

Lesson 3 - Try to make it a habit to note down (keep in temporary memory) the taxi's or rick's registration number before you board it. You never know when it might just come in handy. Most taxis and ricks have their registration number on the inner wind-shield or the back of the front seat, so you may note it down even after you've boarded.

Lesson 4 - Make it a habit to file a complaint (it's online and just takes a while) whenever you come across a faulty/tampered meter.

Lesson 5 - Don't lose hope (is the moral of the story)!

Welcome!

Hello and welcome to my blog!

I have always liked to be unconventional....So, way back in 2003, when the world started blogging on blogger.com (Google had not acquired it then), I too had started blogging, but on a different blogging site since I did not like the interface and the customization options provided by blogger. I used to blog at http://www.blogsource.com and unfortunately (I still do not know the reason) the site shut down in 2006. Thereafter, I had been thinking of creating a new blog and had created this one too but never blogged on it.

Now I'm back to blogging and I intend to use this blog to put down my thoughts, views, opinions and experiences. You are most welcome to leave your comments.

Disclaimer: The views expressed here are my own and do not represent any official views of the organisation I work for or any other institution or individual.

Welcome to Vivek Toshniwal's (VT's) Blog!  Keywords: Vivek, Toshniwal, Vivek Toshniwal, VT, Mumbai, Maharashtra, India.