Nano, Nano – Egalitarian – “Just a Line from a Movie…”

May, 2009

Nano Nano … No, I’m not channeling “Mork.” It’s the new $2,200 car going on sale in India. PT’s Ops Director Andy mentioned this critter the other day. His comment was something like, “They are going to sell millions of these in India, and they will have to find a place to park them.”
The Nano looks like a “Smart Car” but very down-market. The car’s creator, billionaire Indian industrialist Ratan Tata, says that he asked a journalist at a trade show how much a car should cost to reach the vast undermarket in India. The response: “100,000 rupees, about $2,000.”
Tata Motors set a price, and then told their engineers to build a car they could sell profitably for that price. It’s about one-third the cost of the next cheapest model in India. It’s basic transportation, but for a person whose experience is four on a motorbike, a bicycle, or a cow, it would seem like a Lincoln Navigator.
The $2,200 model won’t export to North America or Europe due to its very lack of any amenities – no AC, radio or passenger-side mirror; one windshield wiper; rubber floor covering; bus-style seat covers – and it can’t meet the strict safety standards, but for the Third World, it seems a winner.
(Don’t worry, Tata says that there will be U.S. and European models, but you can rest assured they will cost more than two grand.)
Oh, and the Nano gets 56 miles per gallon and puts out less pollution than a typical motorcycle in India.
As for those of us in the industry, formal parking will be needed for this egalitarian mode of transportation for the great masses in India. Our next great parking marketplace?
I know, I know … Mork spelled it “nanoo nanoo.” And Robin Williams is recovering from heart surgery very similar to the one I had 18 months ago. I understand that four hours after the surgery, he had the hospital staff in stitches. A better man than I am, Gunga Din.
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Egalitarian ... I used a big word in my blog last month and thought some explanation might be in order. Automobiles are, in fact, the most egalitarian – read that equal or level – form of transportation ever invented. They are relatively low cost (or high cost, if you want fine Corinthian leather,). They go where you want to go when you want to go, and at the pace you want to go. You make the choices, not a traffic planner in Washington, DC.
The numbers show that autos cost less per passenger mile to run than airplanes or long-range trains. And the people who use them pay for their use, not the rest of us through government subsidies to all types of rail transportation.
I agree that central cities have traffic problems, but that is typically caused by government subsidy of on-street parking. If the government kept its nose out of the parking business, people would make economic decisions as to whether they wanted to drive or take alternative forms of transportation.
Consider this: If it cost $75 a day to park your car on weekdays in downtown, many people would band together and share vehicles to get to work to share the costs of parking. If two or three people decided to ride-share to save $50 each a day in parking costs, there would be no traffic, no rush hours, and all would be right with the world.
People will make these decisions on their own. Everyone is treated the same, and those who can afford to drive by themselves will; and those who can’t or don’t wish to, won’t. Seems fair to me.
Mass transit is the least egalitarian form of travel. It goes when others want it to go, goes where others want it to go, and you are forced to mix and mingle with a thousand strangers you don’t want to meet. Ever miss the last train? Now what? Long live the private automobile.
Hey, if you want to ride the train, more power to you. But I don’t see why I should pay for your trip.
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It’s Just a Line from a Movie … I was taken aback the other day when the head of a large manufacturing company said that “If you build it, they will come” is just a line from a movie. But then I got to thinking about it. He’s right, to a point.
In his business, building a widget and putting it in front of the customer doesn’t work. Marketing is how a company is driven. First, research must be done, the needs of the marketplace ascertained, then the product properly designed, built, priced and promoted. If all the stars are in alignment, it will be a success. It’s a lot of work.
However, my continuing reference isn’t to technological advances; it’s to point out that providing free parking won’t bring shoppers downtown, and charging for parking won’t keep them away.
If you have an attraction, and it’s a good one, people will park blocks away and walk, or they will pay a lot to park. (Remember how much they charge for parking at Dodger Stadium, more than the price of a seat; or across the street from Madison Square Garden, more than the price of admission. The price of parking certainly doesn’t slow one down a bit.) However, if you have a tired, run-down, half-empty downtown, people won’t come if you pay them to park.
Century City and The Grove here in LA both are upscale destination shopping centers. Both charge for parking. They are very successful. Westside Pavilion just up the street is a nice mall, but it doesn’t hold a candle to the other two. It has been struggling and only recently began to turn it around. How? It added a 12-plex cinema. Parking has always been free, but that made no difference. It was the renovation and the movies that brought the crowd.
A consultant I know was helping a city with its parking issues. They had a very popular street fair that ran every weekend in the summer. People paid $5 and parked in a muddy field and walked six blocks to the fair. No one had complained; the city just felt that they weren’t providing good customer service.
My consultant friend agreed that it might “look” better to provide a nice multimillion-dollar parking structure, but that it wasn’t really necessary. The fair couldn’t be more successful.
There are hundreds of such examples.
If you build it, they will come.
See you at the IPI show May 17-20 in Denver.