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By Agence France-Presse SINGUR, India -- His voice shaking, security guard Sanjib Chowdhury says he fears opening the gate of the eastern Indian factory that is assembling what will be the world's cheapest car. Furious farmers and rights groups say the expropriation of land in West Bengal state for the plant was little more than theft and protesters are doing their best to throw a spanner in the works. "Villagers are threatening to kill us if we keep working at the site," he quakes through the iron gate of the project where the Nano, dubbed the "king of econoboxes" with its promised price tag of $2,500, is being made. "I didn't report for duty for two days, I was so scared," Chowdhury said at the factory in Singur in West Bengal, viewed by the state's Marxist government as a test case for drawing more big-scale industry to the impoverished region. The car -- which Tata chairman Ratan Tata conceived with the aim of getting Indians off their motorcycles and into safer cars -- was unveiled with huge fanfare early this year at India's premier automobile show in New Delhi. But since the sporty four-door, five-seater with its 623-cc engine was shown to the world to industry acclaim its ride has been anything but smooth. "Hardly a day goes by" without often violent protests by activists angered by the government's seizure of farmland for the project, said Chowdhury. The walls of the plant owned by Indian giant Tata, which earlier this year bought British motoring icons Jaguar and Land Rover, are plastered with warnings to workers to leave or "face the consequences." "Opposition parties and land owners protesting the land acquisition are threatening the workers not to report to duty," said senior police official Raj Kanojia, adding that security in the area had been tightened and police watch towers are being built. Standing near a factory shed, labourer Tapan Gayen said: "We're working under the shadow of fear. Work has almost come to halt." But despite the protests, Tata officials say the plant -- slated to produce 250,000 Nanos annually -- is nearly complete and insist the car will roll off the assembly line before year end. The head of the Singur Land Protection Committee protesters, Becharam Manna said, the group is "not against industry" and wants Tata to set up the factory in Singur. But the group is angered at how land for the factory was taken by the state government, and wants it to return 400 acres (161 hectares) of 997 acres seized from farmers who did not want compensation. Some farmers value their land "more than gold," he said, adding the money given was too little and they can't find other work. The farmers' protests have sparked a debate over whether farmland should be used for industry in India, where 60 percent of the more than 1.1 billion-plus population lives off agriculture. A showdown looms as the protest group, backed by the powerful regional Trinamool Congress party, aims to cut off the plant's power and water supplies starting August 24. So far, neither Tata nor the state government is budging. Tata Motors managing director Ravi Kant concedes the situation is "bad" but not so bad for the car company to exit, and insists the Nano will roll out from the Singur plant sometime in the October-December financial quarter. "We could have set up the plant anywhere. But we decided on West Bengal as we want this part of the country to see development," Kant told shareholders late last month. "Some elements are causing problems. But we're moving ahead," he said. Opposition to the plant is not the only problem Tata Motors faces. Global steel prices are at record highs, making it tougher than ever for the company to keep the Nano's base price at $2,500. Still, it is expected to hold the price at the announced $2,500 for the launch period at least as chairman Ratan Tata said, "a promise is a promise."

By Aida Sevilla-Mendoza Philippine Daily Inquirer FORD MOTOR CO.'S sale of its Jaguar and Land Rover brands to India’s Tata Motors Ltd. for $1.7 billion is just one sign of a big shift in the global auto industry. That an Asian manufacturer producing the world's cheapest car, the $2,500 Nano, would buy two luxury British marques from an ailing US giant automaker is ironic enough. It could only mean that Tata intends to become a global player, using Jaguar and Land Rover’s advanced technologies to challenge high-end competitors like BMW, Mercedes-Benz and Audi. Ford, which lost more than $15 billion in the past two years, sold Jaguar and Land Rover at a loss to help fund its restructuring effort after having spun off assets such as the Hertz car rental agency and Aston Martin. Ford is not the only one in trouble. General Motors lost $39 billion in 2007, the largest deficit to be posted by a US carmaker. Like Ford and GM, Chrysler has negotiated with the United Auto Workers to cut production levels to reduce inventories rather than close more US assembly plants. 2008 may be the worst year in a decade for the US auto industry. J.D. Power and Associates, the marketing firm, cut its annual forecast from 15.7 million to 14.95 million vehicles, which would be the lowest sales level since 1995. The credit turmoil, high gasoline prices, the housing crisis and the looming recession are slowing sales. Auto finance companies, afraid to repeat the mistakes of subprime lenders in the housing industry, are generally declining to make risky car loans. The problem is that many auto manufacturers depend on the US market for more than half of their profits. Toyota said it may miss its sales target of 9.85 million because of the stronger yen vis-à-vis the US dollar and slumping sales in the United States, Europe and Japan. Nissan reported an 11 percent drop in profit for the fiscal year ending March 2007, its first since Carlos Ghosn took over as CEO in 1999. Growth in the US car market in the next six years will be nearly flat, up 1.5 percent to 17.9 million vehicles by 2014, according to CSM Worldwide Inc., a global auto market research firm. In contrast, the emerging markets are expected to account for some 76 percent of all global auto sales growth during the next six years.In that period, CSM forecasts vehicle sales in China to shoot up 7.3 percent, India up 15.5 percent, Russia up 6.2 percent and Brazil up 5.7 percent. In short, global auto sales growth is shifting from the developed to the developing countries. No wonder GM, Volkswagen, Toyota, Fiat, Honda, Hyundai, etc. are relying on Asia and Latin America for profits. In China, annual economic growth averaging 9.6 percent over the past five years has made cars affordable to more people. Total auto sales in China jumped 21.84 percent to 8.79 million units in 2007. GM’s joint ventures in China will spend $1 billion a year over the next five years to keep up with the explosive growth in China’s auto industry. GM, which along with Volkswagen established an early foothold in China, will sell more than one million Cadillacs, Buicks and other models there in 2008, a more than 150-fold increase in sales over a decade.Nissan is trying to offset its US losses by boosting sales in Russia, India and China but is lagging behind in Russia and India. Nissan, which has a joint venture with Dongfeng Motor Group, expects sales in China to increase this year to 500,000 vehicles. Nissan plans to introduce three new models in China this year, including the crossover SUV Qashqai. Nissan is building a plant in Russia, where Toyota has already started production. Note that large or midsize cars sell well in China, while in India, mini cars are in demand. This means that even if their sales volumes soar in India, car manufacturers reap smaller profits than from bigger vehicles that sell in the United States. Not surprisingly, Suzuki and Hyundai are prospering in India.But multinational automakers also face keen competition from homegrown manufacturers in the emerging markets. Although they may have joint ventures with the multinationals, Chinese manufacturers like Shanghai Automotive Industry (SAIC), Chery Automobile Co., Geely Automotive Holdings, Dongfeng Motor Group, Great Wall Motor and BYD Automobile make and sell their own independent brands, just as Tata Motors and Mahindra & Mahindra Ltd. do in India. Some have even begun exporting and have plans to enter the US market. So here’s the big shift: while global players are turning to the emerging markets for profits they can no longer realize in the United States, Europe and Japan, domestic manufacturers in these nations are building up their own auto industry with technology transferred by the multinationals through joint ventures. Quid pro quo! * * * Don’t miss the opening of the Manila International Auto Show at 10 a.m. Thursday at the World Trade Center when precision driver Russ Swift shows off his spectacular driving skill. See you there!

By Tessa R. Salazar Philippine Daily Inquirer INDIAN carmaker Tata recently took the automotive world by storm when it launched its $2,500 Nano. The world's cheapest car, by far, costs only the equivalent of a high-end laptop in this part of the world, at around P100,000. To be sure, though, Tata threw out all the little extras to come up with only the barest essentials of a car. At 625-cc, it has one windscreen wiper, no power steering, no power windows, no air-conditioner, and will give about 20 km to a liter. And no one in India is complaining, yet, because the Nano has been marketed as a four-wheel vehicle alternative to the motorcycle. 4 times as much In comparison, a decent three-liter diesel-powered jeepney in the Philippines would cost four times as much. The cheapest car exported to the Philippines is an 800-cc ultra subcompact priced at P319,000. There have been earlier reports that Nissan in India would try to approximate the Nano with its own $3,000 car. Nissan and India's largest carmaker Maruti Suzuki (the maker of budget car Alto) had planned to come out with a 3000-lakta (dollar) in 2006, but now Tata beat them to it, according to an Inquirer Motoring source who refused to be named. Still, the development of the Suzuki car continues and a release is expected between 2009 and 2010. If it does materialize, it will be launched simultaneously in Asian markets, most likely "after the India and China launches," the source predicted. Ferdie Raquelsantos, spokesperson of Motor Vehicle Parts Manufacturers Association of the Philippines Inc., a proponent of the first Filipino utility vehicle (PhUV) that features 60 percent local content, said the small car in the Philippines would not be as marketable as in India due to the "big family size of Filipinos." "And we're still in the level of trying to afford an underbone motorcycle. We don't have engine builders. And the transmission builders we have are even limited only to their own in-house models," he said. Raquelsantos said this should explain why a "majority (of motorists) would either own a utility vehicle or ride a much affordable motorcycle for running around, especially for starting families." Market acceptance Nissan Motor Philippines' Raymond Tribdino describes why the Tata Nano would be a bestseller in India, but not necessarily so in the Philippines. "The total industry volume (in India) is almost eight times as much as the Philippines." He added that in the Philippines, "the total industry volume is expected to increase only at a rate of 5 percent per year starting from the 118,000 units reported at the close of 2008." "The real problem for a super cheap small car in the Philippines is market acceptance. Small displacement cars now are slowly getting attention for fuel economy, etc., but durability is an issue since our roads and traffic conditions are a huge stress on the engines and drivetrains of small displacement engines." Tribdino cited the China-made Chery QQ, which he said would be a "good benchmark on the small cheap car and that infrastructure (for a super cheap car) is one key point for its acceptance, aside from the necessary critical mass needed for such a small car to succeed." He added that government support and the development of "a truly cohesive small car development plan is necessary." Value, not price Tribdino said that even the current car development program is stunted because of government inaction on tariffs and imported vehicles. Finally, in most countries where small cars are successful, mainly in European countries like Spain and France, and in Japan (with its Kei-cars) the key has been value, not pricing. "What comes with the price is the most important point in pushing for a small cheap car, and not the price alone." And if, for example, the cheap Nano would be exported to the Philippines as a CBU (completely built up), this "cheap" car may no longer be as cheap when it arrives in the country and the existing tariffs are applied. Pepito Castro, auto sales and marketing manager of Suzuki Philippines, said "customs duties are at 30 percent compared to those imported from Asean member-countries which are zero rated or at minimal rates. Considering the distance, freight (charges) have something to do also (with adding to the final price)," he said. Additional government regulations, such as emission requirements, would also add cost. So, we shouldn't expect to see, much less ride in, a P100,000 car on Philippine soil in the very near future. Still, the local motoring industry has sprung surprises in the past. And one of these days we might awaken to a hundred-grand car assembled in your friendly neighborhood garage, complete with power amenities and an air-conditioning system as well as with two wipers.