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The Week That Was:

From: Vartaa Editorial Team on Jan 2, 2017

Defending demonetization

PM Modi ended 2016 by going live and speaking to the nation in an attempt to defend his move to demonetize the Rs 500 and Rs 1000 currency notes. The PM's remarks came while ATMs continue to witness cash shortages and the RBI came out with new cash withdrawal rules. The opposition has continued its attack against the government questioning its sensitivity towards the difficulties caused by this measure to the common populace.

Family drama in UP

The simmering father-son battle that had been brewing for a while in the Samajwadi Party in UP reached a anti-climatic farce with the SP supremo Mulayam Singh first expelling and then re-inducting his son and CM Akhilesh Yadav into the party. After his expulsion, Akhilesh had showed his hold over the MLAs by gathering more than 200 of them at his home. Fellow politicians such as Laloo Prasad also stepped in and tried to mediate the matter. By the end of the day, Mulayam had to take back his expulsion order and back down in this feud which perhaps still hasnt seen its end as yet.

New LG in Delhi

Another feud appeared to reach a denouement this past week as the Lt.Gov of Delhi Najeeb Jung quit his post for personal reasons and was replaced by Anil Baijal. Najeeb Jung and Delhi CM Arvind Kerjiwal had been involved in a running feud over the last 2 years of the AAP govt in Delhi with Kejriwal perceiving Jung to be too close to the BJP. With Baijal now taking charge, the focus is on whether he will release the Shunglu report, which had been commissioned by Jung to investigate misuse of power by the AAP govt. Baijal has so far adopted a non-committal stance with respect to his relations with the AAP govt.

Opinions you must read:

  • The Economic Times looks back at the political developments in India in 2016, particularly at the inability of a disunited opposition to combat the NDA govt.
  • What can Apple do to succeed in India?
  • Francis Fukuyama bemoans the rise of the post-factual world and its serious consequences for liberal democracies

Chart of the Week

The world's major car makers are trying hard to gain a foothold in India's fast-growing passenger car market which grew at a scorching pace of over 10% in the first 9 months of 2016. In 2015, car sales set a record when they exceeded 2 million units for the first time. Despite the fact that major global carmakers such as Ford and Toyota have in the Indian market for over 20 years now, they still have not been able to unseat the undisputed market leader- Maruti Suzuki India Limited.

Despite tough competition from seasoned car makers, favorable regulations, ad years spent learning the Indian market, the sheer dominance of Maruti Suzuki is nothing short of baffling! This week's chart shows the market share of major car brands in India. As you can see, Maruti Suzuki leads its competitors by a country mile and holds almost half the market. Hyundai is the only seasoned foreign carmaker that poses any immediate threat to Maruti's dominance due to its impressive lineup of models at the lower end of the market. Hyundai first made its foray into India with its hit Santro in the mid-90s and has been the only foreign OEM to have consistently refreshed its now expansive portfolio of entry-level models.

In third place is another Indian manufacturer- Mahindra and Mahindra. Both Tata Motors and Mahindra, after making vehicles outside the passenger segment for decades entered the passenger segment aggressively in the late nineties. Their fortunes have diverged sharply over the past 5 years. While Tata has given up share to its competitors, Mahindra with solid offerings in the fast-growing compact SUV and MUV segments has gained considerable share. The top 3 players hold an incredible three-quarter of the Indian passenger vehicle market.

In the first couple months of the new year, carmakers will continue to woo the Indian customer with newer models- Maruti Suzuki launches the Ignis and Baleno, Tata its newest SUV offering the Hexa, Hyundai launches an i10 refresh and the new Eon, and Toyota launches the Prius refresh. It will be interesting to see if Maruti continues its strong run which has excited customers and shareholders alike.