Mr. Company can you please email me the financial report instead of sending a hard copy?

Every time I look at the cabinet below the TV where we store old newspapers, magazines, old books, etc which we throw out or sell every month, I realize that a huge chunk of it is financial reports which companies send to their shareholders every quarter. Also most of them are still in their plastic bags or paper envelopes … yeah they go straight from the courier guy’s hands into the waste paper cabinet. Why would I bother to read a hard copy of an annual report when I can easily browse through one online (using control F) and even have all kinds of financial analysis on the various financial portals? Seriously how many of us still bother to read hard copies of annual reports?
So I really wonder why these companies still courier hard copies to all the shareholders every quarter. Surely at least 50% of all the shareholders are computer literate and can use a soft copy of the report which can be mailed to them or by going to the company’s website to look for information.

Well the reason I’m writing about this is; imagine the amount of paper we waste over this and what this does to our ecology. As per the American Forest & Paper Association to print 1,200 copies of National Geographic we need to chop down one tree.

So I tried to do a small analysis to calculate roughly how many trees we can save if we stop the use of hard copies of financial reports. The company I’v chosen to do this small analysis is India’s biggest company – Reliance Industries.So even if companies stop sending physical copies of financial reports to half of their shareholders and instead email soft copies as attachments, we can save around two crore trees every year and yeah that too just in India!!! I know we have recycling of paper and all … but even then this is an issue to ponder on! Not to mention the cost of couriering and labour for the companies, which goes in packing the reports in envelopes and mailing them!

Companies should give the option to the shareholder’s to either receive a hard copy or a soft copy. Thus a large amount of cost can be saved for companies if they opt for emails rather than printing the documents and couriering them and in turn this will improve their bottom lines. This is an indirect incentive for shareholders as improved bottom lines mean bigger bonuses and also possible capital appreciation in the stock market.

So Mr. Company can you please email me a soft copy of the financial report instead of sending a hard copy next time?

Chronicles of Tata : Voyage of the Tata Nano

When Ratan Tata unveiled the “Nano” in Jan 2008, the whole world stood up and took notice. It was branded the wonder car! People queued up for registering and were ready to wait for long durations to get their hands on a Nano. Suddenly everyone wanted a Nano. It was engineered for a family of 4 on a bike or a scooter and was expected to eat into the two-wheeler sales in a big way.

But the last six months show a very very different picture. Sales of Nano have been dipping mercilessly since July’s record sale of 9,000 Nanos while total car sales in India have been showing a record growth. November, where just 509 Nanos were sold, was the fourth straight month of falling sales for the Nano since July 2010.

So what’s the problem? Is it the car in itself? Is it the manufacturer? Is it the competition? What?

It's not the car. It's spacious and comfortable, the air-conditioning is quick and effective, at 60 kmph it drives smoothly, it’s easy to park; its fuel efficient; and all that for just over a Lakh of rupees! To add to it, the manufacturer, Tata is the most reputed corporate house in India. And where’s the competition? There is no four-wheeler in that price range which can compete with the Nano. So again where’s the problem?

Problem 1: Positioning & Perception
When the Nano was launched, most people who applied for it were from the higher middle class with access to funds, who were just attracted by the glamour and hype of the Nano. Their interest soon waned off when the aura around the world’s smallest car disappeared. They now call the Nano an air-conditioned Auto Rickshaw! We have to remember that the Nano’s main target, are people who own two-wheelers or who do not own any vehicles. These people mostly from the lower middle class or teenagers do not have easy access to funds.

Problem 2: Lack of financing options

Tata officials believe that it’s the lack of financing options available to buyers which is causing a dip in the Nano sales. Banks have been unwilling to lend to most low-income customers on concern that they might default. Dealers claim that almost nine out of every ten prospective Nano customers are also shopping for a loan. Also the rate of interest charged by banks for Nano loans is around 20-22% (equivalent to ROI for two-wheeler loans) which is almost double the rate on other car loans.

Problem 3: Safety Issues

At least six Nano cars have been gutted so far in various parts of the country and this is playing on the minds of prospective customers. Tata Motors has been asking existing Nano customers to bring back their cars to add free of cost safety devices to prevent the vehicles from catching fire, but insist that it is not a "recall."

Problem 4: Waiting period and unavailability of spare parts

Other problems include the long waiting period and also the unavailability of spare parts due to shifting of vendors from Pantnagar to Sanand. People still think the Nano is sold through the booking process, which makes them believe there will be a long waiting period.

Going Forward:
Tata seems to have understood the problems and is trying its level best to get the Nano sales on course. They have been trying to improve the interaction between customers and financiers and have even launched an exchange scheme under which the owner of a two-wheeler can exchange his bike or scooter for a Nano, by paying the differential price. The company is also trying to provide financing for Nanos through its motor finance arm Tata Motors Finance Ltd.

To woo potential rural customers who have neither driven a car nor visited a car showroom, Tata plans to set up kiosks in the countryside. They are also trying very hard to dismiss the perception that advance bookings are still required to buy a Nano.

In addition, most importantly dealers across India are pointing out that existing customers of the Nano are really satisfied with their cars.

So I think once the Sanand plant is fully functional and the financing part is taken care of, we could soon see the Nanos breed like pests and choke our already overcrowded roads!!