Welcome back, hatchbacks

Also in today’s edition: The CPU runneth over; Aviation mergers in India are cursed

Good morning! It's appraisal season, and astrology apps are buzzing with queries from folks wondering if they're gonna snag that sweet, sweet promotion. In fact, per The Economic Times, career-related questions in the astrology app Astroyogi have skyrocketed by 50-60%. Most of these inquiries are coming from the Gen-Z crowd. Well, well, looks like for all their rebellion, zoomers ain't that different from their elders. In times of doubt and confusion, they also flock to astrologers.

🎧 Can India convert waste into coal? Also in today’s episode: another whistleblower blows the lid on Boeing’s safety practices. Tune in on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.

Programming note: We are closed for Eid al-Fitr today. There will be no edition of The Signal and The Signal Daily podcast on Friday. We will resume on Monday, April 15.  

Roshni Nair, Jessica Jani, and Anup Semwal also contributed to today’s edition.

The Market Signal* 

Stocks & Economy: US inflation is giving sleepless nights to the Federal Reserve. Retail inflation rose 0.4% in March, belying the Fed’s assessment that it had got a reasonable grip on prices. In fact, the quandary was palpable at its March monetary policy meeting where some officials expressed concern that the current interest rate levels were not enough to shackle inflation.

Shares fell as traders’ hopes of an early rate cut faded. The dollar jumped to a 34-year high against the Japanese yen, drawing speculation of likely intervention by the Bank of Japan. 

Meanwhile, West Asia is on high alert after the US sounded warnings of an imminent Iranian attack. German carrier Lufthansa has cancelled flights to Tehran. 

Asian equities followed the US markets in early trade. Indian markets are closed today for Eid al-Fitr. The government will publish its retail inflation numbers on Friday. 

AUTO 

Small Is Beautiful

Sports utility vehicles (SUVs) have seen a meteoric rise in popularity in the last five years and have been driving sales in the Indian market, previously ruled by small cars. In FY2023-24, utility vehicles accounted for nearly 60% of total passenger vehicle sales. In fact, SUVs have contributed to an increase in our petrol consumption—which has more than doubled in the last decade. 

But to expand in the Indian market, affordable cars are still needed. Toyota’s Indian subsidiary is hoping to double sales in India, primarily driven by rebadged versions of Maruti Suzuki cars. Toyota has been selling five rebadged Maruti cars since 2022, including the hatchback Baleno as Toyota Glanza, priced at Rs 8-13 lakh, compared to its other cars priced Rs 19-50 lakh. Plus, Maruti Suzuki is still betting on the small car market, with chairman RC Bhargava anticipating the segment will make a comeback by 2026.

PODCAST

Tune in every Monday to Friday as financial journalist and host Govindraj Ethiraj gives you the most important take on the latest in business and economy.

Today, he speaks to Ricky Thapar, treasurer of the Poultry Federation of India, on why prices of chicken could rise sharply—and with it, your non-veg food bill.

ARTIFICIAL INTELLIGENCE

Brothers In Arms

Every major AI company wants to have a plan B that minimises dependence on Nvidia. Microsoft and Amazon have their own central processing units (CPUs) based on chipmaker Arm’s architecture. Now, Google has unveiled Axion, a custom chip that it claims performs faster than similar Arm and Intel hardware. Axion will be available on rent to Google Cloud business customers later this year; these clients will also likely get access to paywalled, AI-powered Search.

In other news: Meta’s and OpenAI’s next generations of large language models, capable of planning and reasoning, will also be available soon. Meta’s, which may launch first, will be embedded in WhatsApp and its Ray-Ban smart glasses.

VC firm Alt Capital, founded by Jack Altman—brother of OpenAI’s Sam Altman—is launching an accelerator, Generate, for mature startups developing AI technologies. Portfolio companies will have access to Microsoft cloud computing credits and graphics processing unit clusters.

AVIATION

Merger, Mayhem, Madness 

Pilots calling in sick, some to protest revised salaries, have destabilised Vistara’s operations. As it cancels 10% of all flights, domestic airfares have risen by 25%. 

Meanwhile, there’s an internal rivalry brewing. 

Mint reports the ongoing merger of Vistara and Air India has sparked a culture clash between employees of both carriers, prompting several to quit. Vistara employees expect to get priority for senior roles because they built a full-service carrier from scratch in a highly competitive market. 

However, Air India workers think the entitlement is unwarranted; after all, Air India is more than twice Vistara’s size in revenue and number of aircraft. 

The Signal 

Mergers are messy, more so in operationally complex consumer-facing businesses such as aviation. Already, India has had a disastrous history of airline mergers. In 2007, flamboyant full-service carrier Kingfisher acquired its polar opposite Air Deccan, the country’s first low-cost carrier. It was widely regarded as a massive mistake that accelerated Kingfisher and its owner Vijay Mallya’s decline. 

That same year, Jet Airways bought the floundering Air Sahara. The deal also pushed the airline into decline. While Vistara is newer, Air India carries the baggage of its government legacy. Customers are expecting the Tatas to spruce up the airline’s image as a staid, unreliable carrier. So far, it’s not going too well. 

In all this, it’s advantage IndiGo. It is now the world’s third most valuable airline behind Delta and RyanAir, with a market cap of over Rs 1.46 lakh crore. 

FYI

India-bound: Reuters reports that Elon Musk will meet PM Modi in New Delhi on April 22 and announce Tesla’s investment plans for India. Insiders say the carmaker has started production for right-hand drive models for India in its Germany plant.

Drawing it in: Premji Invest may invest $50-70 million in Canva, Moneycontrol reports. Azim Premji’s fund is reportedly scouting for bets in the generative AI sector.

Top honours: Jawaharlal Nehru University has been ranked as India’s best university by the QS World University Rankings by Subject 2024.

Teaming up: Space startup Garuda Aerospace has received its first order from Isro for AI- and machine learning-powered quadcopter drones, company CEO Agnishwar Jayaprakash announced.

Game on: News aggregator Apple News is reportedly testing a new game, Quartiles, whose interface resembles The New York Times’ latest runaway hit, Connections.

THE DAILY DIGIT

$14 billion

The value of iPhones assembled in India in the last fiscal year, indicating doubling of production by Apple in the country. Apple now makes 14% of its smartphones in India. (Bloomberg)

FWIW

Boomers are workers: If you think nobody wants to work anymore, you're wrong. Baby boomers want to grind all their life. No kidding. Loads of them, at least in the US, are returning to the workforce after retirement, because, apparently, "how long can you lay on the beach?". According to the Pew Research Centre, the number of those who've kept working into their sixties and seventies has quadrupled in the US since the 80s. If you think cash is the draw, you're wrong again. Boomers want to escape the solitude of retirement. Their hobbies ain't half as fun as office drama. Getting back to the office gives them camaraderie and mental stimulation. Well, if you look closely, that's actually a cautionary tale against building your whole life around work.

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