It is interesting to note that both these beverage giants have opted for the more healthy fruit drinks, at a time when the non-alcoholic carbonated drinks market is growing at low to mid single digits. In contrast fruit juices, sports and energy drinks, are growing at 30-40% in India. The new juicy brands are also likely to provide a wholesome boost to the revenue figures of these brands whose carbonated brands are currently being swamped by a controversy regarding unhealthy levels of pesticide contents.

Part of the structural revamp that the global automotive industry has been through has resulted in component manufacturers or suppliers getting Tierised. While Tier 1 suppliers would be involved in component aggregation and module supply/assembly, Tiers 2 or 3 would take on the role of component suppliers.

The BMW group’s decision, to source door panels and seats from India, is based on the belief that India’s growth potential in the automobile component sector is not in the Tier-1 group but in the ‘value chain’.

Underlying this notion is the fact that wages constitute a larger percentage of total cost for Tier-2 and downward suppliers, while parts purchases constitute a major part of Tier-1 suppliers. Since India is a low cost producer in terms of wages, the scope for cutting overall cost lies in the lower end of the value chain. Also the largest sales market for Indian component makers are in the Tier-1 global automotive suppliers.