Intellectual Thoughts by Sanjay Panda: January 2008

Americans prefer Indian products to Chinese

A majority of Americans are not averse to purchasing made-in-India products, but the opposite is the case for those made in China, according to a new survey conducted by renowned US-based business magazine Fortune.

In the wake of some of the American companies, including toymaker Mattel, recalling products they sourced from China due to high lead content, nearly three in five (57%) of the US citizens surveyed by Fortune said they were "less likely to buy a product if it is made in China."

As much as 52% of the survey respondents said such an incident would not affect their purchasing decision if the product was made in India.

In the survey, only 35% of Americans said they were "less likely" to purchase a product manufactured in India, while 11% said they were "more likely" to buy such goods.

For China-made products, 11% people said they were "more likely" to buy these products, while 30% said it did not matter to them whether goods were exported from the dragon country.

Fortune magazine, which surveyed 1,000 adults throughout America between January 14-16, said "where a product is manufactured does not impact Americans' purchasing decisions except when that product is made in China."

Nearly three-in-five (57%) Americans were less likely to buy a product if it was made in China. When products were manufactured in other areas, such as Eastern Europe (57%), Western Europe (55%), Canada (53%), India (52%), Africa (51%), Mexico (48%), Japan (47%), and South Korea (46%), nearly a majority said it did not matter, the survey found.


Asia Seen Weathering Any US Recession

Asia would be able to weather any recession in the United States, analysts say, because rising trade and investment within the region make it less dependent on the U.S. economy than in the past. While a severe downturn in the United States would drag on Asian growth by eroding demand for exports, a rapidly growing middle class is fueling orders for automobiles, electronics and housing -- much of which will be supplied from Asia itself.

Voracious demand for oil, iron ore and other commodities to build roads, sewage systems, and office buildings -- especially in the booming economies of China and India -- will also help sustain the region through any U.S. slowdown.

The U.S. economy is not that important anymore. Excluding Japan, 43 percent of Asia's exports go to other nations in the region, Lehman Brothers calculates -- up from 37 percent in 1995.

China and India represent a bigger presence on the world stage than just a half dozen years ago. China, in particular, has "more it can bring to buffer whatever happens in the U.S.

A drop of 1 percentage point in U.S. economic growth would shave 1.3 percentage points from China's growth rate due to lower exports, Citigroup says.

Since China is growing so fast, that isn't likely to make much of a dent. China's economy will still expand 11 percent this year, slightly slower than in 2007, Citigroup projects. Lehman Brothers forecasts 2008 growth will drop to 9.8 percent.

But some economist cautioned that growth in China and India could not make up all the slack of a U.S. downturn.

Asian stock markets -- many of which had stellar runs last year -- have tumbled in recent weeks amid worries that a slowdown in the U.S. will hurt corporate profits.


Tata unveils the Nano, world's cheapest car

Tata Motors Ltd unveiled the world's cheapest car on Thursday(10th jan), which cld bring car ownership closer to millions of consumers. The 4-seater Nano, with an engine around 625cc, will have a dealer price of 100,000 rupees ($2,500) -- about half the cost of the cheapest car availble on today's market.

Let me assure you and our critics the car we have designed will meet all safety norms and all foreign environmental criteria," Chairman Ratan Tata said as he proudly unveiled what had been dubbed the "People's Car" at the Auto Expo in New Delhi.

Tata said the car would have a rear-mounted engine and travel 20 km per litre. It would be offered in a basic model and two deluxe variants. The proof of the pudding will be in driving it, but visually it looks pretty good," said an auto analyst. "The pricing was a bit of a surprise. I thought it would be a bit higher."

Tata has said it will initially produce about 250,000 Nanos and expects eventual annual demand of 1 million units.

Global car makers -- initially sceptical that Tata could produce such a low-cost car -- are now scurrying to make their own versions to meet the needs of cost-conscious consumers in emerging economies such as China, India and Russia.Ford this week said it would build a small car in India within two years, while the alliance of Nissan Motor and Renault, which has made a big success of its no-frills Logan sedan, plans a $3,000 car with Bajaj Auto. Volkswagen, Toyota, Honda and Fiat have also said they are looking at small cars for emerging markets where strong economic growth has made car ownership a reality for millions.