The Local Racist... - The Honest Truth By Ajit Dayal
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10 JANUARY 2008

Over the past few weeks, the Indian ego has been hurt.
In fact, bruised.
As in Bodyline bruised.
The umpiring by Bucknor has cost the Indian team dearly in terms of a lost test match.
Most of us in India see the umpiring decisions - and the ban imposed on our own Bhajji - as a white man v/s brown man thing.

But the racist slurs may not be restricted to the sports fields.
All of India (if the press can be defined as "all of India") was in a twist because the Orient Express Hotels of Britain, has rebuffed the overtures of our own venerable Taj Group to work together. Indian Hotels, the owner of the Taj group of hotels, reportedly owns 11.5% of the UK company.

But the CEO of Orient Express, Paul White, shut out any hopes that the Taj group may have of working with a "premium" brand. In a letter dated December 10, Paul White wrote this Orient Express did not wish to associate with Taj and that "any association of our luxury brands and properties with your brands and properties would result in a reduction of the value of our brands and our business."

Ouch. Mr. White sure has a black tongue.

And unlike the white man who spoke with a forked tongue, this one was a pretty straight forward "get lost".

No mistake about that.

The Indian ego is obviously pretty hurt. This atrocity in a week when an "Indian" was named CEO of Citibank. And in a time and age when another "Indian" is the world's steel baron (the epic takeover of Arcelor by challenger Mittal).

The White response was, well, seen to be a call against a dark skinned person. Never mind the fact that the Tata group belongs to the Parsi community, immigrants from Persia, who are pretty white. But the die had been cast and Paul White was painted as the remnants of the "superior" race. A racist.

The Indian press had a field day writing about this episode and reminding Orient Express Hotels what happened to Arcelor - eventually. But the bad news still rolled in. Across the Atlantic, the Tata bid for the Jaguar and Rover brand names and factories (to be purchased from bankrupt owner Ford), drew a dissenting note from some of the Jaguar dealers in USA. The dealers argued that the image of Jaguar - a luxury brand - would we tarnished if an Indian group like Tata owned it.

The Indian pride got whipped up into a frenzy. Not to be left out of the fray, the Indian government officials also let it be known that "Mera Bharat is Mahan". Trade and Industry minister Kamal Nath said the comments reflected "the past," - effectively branding Orient Express Hotels as a remnant of the raj.

But representative of the Indian government, who were the original 50% partner in the joint venture with Suzuki and heaped huge benefits on Suzuki to give it an edge over competition, were nowhere to be seen when Mr. Osamu Suzuki, the Chairman of Suzuki Motors Company, Japan, made some negative remarks on Tata. In the same week that this Taj-Orient fight was going on. Osamu Suzuki was in India questioning the Tata bid to build an INR 100,000 car. The December 12th news item in the Business Standard, quotes Osamu Suzuki "We don't know the details about the $3,000. Is it the part cost? Is it the retail cost? We don't know about the safety norms, carbon dioxide or environmental performance of this car. Does it include air bags?"

To ensure that this was not a "lost in translation" issue, Osamu Suzuki apparently expressed similar doubts at an industry event that very day. "In case there is sacrifice on safety and emission norms, the manufacturer does not truly shoulder the responsibility of an auto manufacturer."

Again on December 21st, Shinzo Nakanishi's gave a clear response to a query from the Business Standard: "How do you plan to face the competition from Tata Motors' new car, which has come to be known as the Rs. 1 lakh car?"

The response from the new head of Maruti Suzuki, "We have read reports that it will be launched some time in 2008. So far, we have not seen the car. There is no clarity yet on important aspects of model such as features, performance, safety, emission and others."

Note the constant reminder and doubts on safety and emission.

Basically, Suzuki was arguing that Tata Motors was building a mule.

And if they were building a ghaddha, they did not belong to the venerable class of automobile manufacturers.

It was like Paul White saying that the Tatas knew nothing about running quality hotels and that they should stick to making dhansak and paprani machhi.

But no Indian press made a comment. No sons-of-the-soil politician wearing khaki came to the rescue of the izzat of India. In fact, there was silence. The government had made its money by selling its shares in Maruti Suzuki Limited. Abhi kya kahena hai?

The Press Trust of India reportedly carried a rejoinder from Tata Motors: "As an auto manufacturer for over 60 years, Tata Motors is conscious of its responsibilities, and all its vehicles have met all the norms and regulations of the countries where they are marketed."

Maybe Tata Motors should write a letter to Suzuki and the Government of India, just as they wrote a letter to Orient Hotels.

Well, as a disclaimer, let me note that we do own shares of Tata Motors for our clients. And don't own any shares of Maruti Suzuki. We don't own any stocks of Indian Hotels for our clients. Or East India Hotels. But all of these stocks could be owned in the future, at the right price, of course.

I don't own any Tata vehicle - and never have owned a Tata car. I like the Taj Hotels more than I like the Oberoi only because the Taj is, well, less exclusive and seems more "ordinary". In Bombay, the lobby of the The Oberoi is a little daunting, a little formal. In Bombay, the lobby of the Taj Mahal Palace is buzzing with activity and noise - a kind of V. T. Station feel to it. Not Chattrapatji Sivaji Terminus but Victoria Terminus. Maybe that's what Paul White was getting at. The Taj may be a luxury brand in our eyes, but it may be "ordinary" in the overall scheme of Orient Hotels.

India needs to calm down a bit and not take all these rebuttals too seriously.

Learn from the Chinese. They sold hundreds of billions of dollars of useless toys that last maybe a few months, at best. They lived with the shame of the "Made in China" label. And while the world gobbled their toys they reaped up a trillion dollars in foreign exchange reserves (that is 4 times what India has).

The Made in China label is now a Rescued by China label. The Chinese are being invited to buy into all those royal, blue-blooded firms like Bear Stearns, Blackstone, Citibank, and Morgan Stanley. Before the decade is out, Wall Street may be re-named The Great Wall of China. And Indian Hotels may be the owner of The Taj Orient Hotels of the World.

The world is changing. The Bucknors, Whites, and Suzukis don't know it yet, but they could find out the hard way. Just as our politicians found out the sheer power of numbers of previously downtrodden people.

In CY 2008 and beyond, you may not be able to run a finance company without Chinese money; you may not be able to run a luxury hotel without the Asian service; you may not be able to win any election without the votes of those you abused.


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