Slick and swift: Maruti's Khattar on the shopfloor of its brand new facility at Manesar near Gurgaon

"When work starts here full steam in a couple of years, producing 300,000 cars a year, it will be the best plant in the country" Jagdish Khattar Managing Director/ Maruti Udyog

It's the first time Maruti Udyog (MUL) has allowed any journalist onto the shopfloor of its brand new facility at Manesar near Gurgaon and, obviously, its Managing Director Jagdish Khattar is keen to get an endorsement of the work being done here. "Don't you like it?" he asks, never meaning it as a question. It's easy to say yes. It's a late September afternoon and the humidity inside the plant is killing (you can see construction workers still trying to finish the ducting for the plant), but to the eye, Suzuki's newest investment in India looks beautiful. The main assembly line is bathed in natural light as workers start assembling the first batch of Swifts that have started to roll off the line. Tens of red, silver and grey Swift cars roll on hangers on the shop roof, seemingly flying from chassis assembly point to the final assembly line. And compared to MUL's first but much older plant in Gurgaon, the 600-acre Manesar facility has vastly more breathing space, both inside and outside. Ask Khattar why MUL decided to get the assembly going, although the plant is still under construction, and he tells you matter-of-factly: "It is because we can claim depreciation for the half year," he says, pausing to add for effect, "and that's a Rs 100 crore saving. When work starts here full steam in a couple of years, producing 300,000 cars a year, it will be the best plant in the country." The Rs 4,000-crore Manesar plant (with Rs 1,500 crore already invested), which will not just assemble Swift cars, but fit them with diesel engines from an adjoining Rs 2,500-crore facility, is Suzuki's attempt to ensure its continued dominance in a passenger car market it has ruled for the last 23 years. MUL already churns out 600,000 cars a year, and when Manesar kicks in, the capacity will soar to 900,000.

Approximately 1,800 km south from where Khattar stands, another ambitious and fierce automotive warrior is plotting similar moves. A man called H.S. Lheem is so busy that he barely has time to breath. Yet, he has kindly offered to give this reporter a guided tour of the expansion happening at his 10-year-old facility in Errungattukottai near Chennai. There are JCB excavators and cement mixers all over the place, and hundreds of workers in hard hats are trying to put up a huge new car factory in record time. "It's not easy making a factory," says Lheem, Hyundai Motor India's (HMIL) CEO of six months. "But what to do, I need the cars that the new factory will make," he says in perfectly good English. Lheem needs cars and he needs them fast. He's got an export order of 25,000 cars, but "I just don't have the capacity," he says almost in despair. "Thank God, I have the garden," he suddenly says, referring to a small bit of the plant that has been converted into a tranquil farmhouse, where India's #3 carmaker rears poultry and pigs alongside Korean vegetables for the Korean canteen.

"Any further increases, especially the one to 150,000, would mean that we will have to think of a volume car" M. Takadegawa President & CEO/Honda Siel

India's automotive CEOs had better keep their yoga books and squeeze balls handy. In what could be industry's most competitive phase yet, vehicle manufacturers have lined up massive investments to boost capacities. Apart from MUL's Rs 9,000-crore and Hyundai's Rs 5,000-crore investments, home-grown giant Tata Motors has put together a war chest of Rs 10,000 crore to do everything from developing new passenger car and commercial vehicle platforms to launch an ultra low-cost car, billed the Rs 1-lakh car, which, if successful, could single-handedly change the face of the industry. Honda Motor is plonking down Rs 1,000 crore to increase its low capacity of 50,000 units a year to 150,000 by 2008, and the plans may include a small car; General Motors (GM) is also investing Rs 1,400 crore, mainly in the building of a new plant and the launch of a small car, the Spark, that could increase the troubled automotive behemoth's market share in India from an insignificant 3 per cent to something more respectable; Ford too, which has hit a sweet-spot with its sedan Fiesta, has a modest capex plan of Rs 400 crore, aimed at debottlenecking its plant in Chennai; Mahindra & Mahindra (M&M), the tractor-to-SUV major, has tied up with Carlos Ghosn-led Renault-Nissan to launch a sedan, Logan, by mid-2007. Finally, Toyota Motors, which, in keeping with its quiet style, hasn't yet disclosed its investment plans, has a stated objective of capturing a 10 per cent share of the car market. If no one's laughing at Toyota's bid to increase market share five-fold (yes, its current share is a modest 2 per cent), it's because, well, we are talking of Toyota here. The Japanese giant has gone from being a nobody to, pretty soon, the world's biggest vehicle manufacturer.

Shifting Gears

Do the numbers, and the industry's investment figures tot up to more than Rs 30,000 crore. That's not too much less than the investment already sunk into the industry over the years, but it's significant for what it will do to the industry capacity: it's simply going to double it. Why are car majors falling over each other to make the investments? Blame it on the market boom. Even as recently as five years ago, annual vehicle sales in India added up to a modest seven lakh a year. Last year, that figure stood at 11 lakh, of which cars accounted for 80 per cent, representing a two-fold growth in that time. This financial year, car sales are expected to surge 10-15 per cent, and by 2010, the size is projected to double to 2 million. Seconds a Scotiabank report on the industry: "Rising incomes and rapid growth in the 20-64-year-old age group suggest that car sales in India could double to 2 million units by the end of the decade."

INVESTMENTS UNPLUGGED By 2010, the demand for cars is expected to almost double to 2 million a year. No wonder, manufacturers are racing to boost capacities.

Tata Motors Proposed Investment: Rs 10,000 crore Reason: Build new platforms for passenger cars, commercial vehicles and launch the ultra-small "Rs 1-lakh car". Develop all-new engines for the three platforms, including common rail diesel engine. Possibly start a joint venture with Fiat to develop the Ranjangaon facility as a two-lakh-car-a-year facility. Upgrade existing range of commercial vehicles. Capacity by 2010: Approx. 5 lakh a year for passenger cars, 2.5 lakh for the ultra-small car and 4 lakh a year for commercial vehicles. What's at Stake? Tata Motors has a little over 16 per cent of the passenger car market, but its position will come under threat once Maruti launches its diesel Swift. Also, compared to its global rivals, Tata Motors has limited access to technology. Hence, the Fiat tie-up. Maruti Udyog Proposed Investment*: Rs 9,000 crore Reason: Upgrade the 5.5-lakh-a-year Gurgaon plant, set up a diesel engine plant at Manesar (near Gurgaon) and increase capacity at Manesar from 1 lakh to 3 lakh cars a year. Capacity by 2010: Approx. 10 lakh a year What's at Stake? MUL is the market leader with 44.25 per cent share, but globally its parent Suzuki is a small player compared to Toyota and Honda. India fetches 12 per cent of Suzuki's global revenues. *Does not include a proposed Rs 2,500-crore investment in "outsourced manufacturing" for Nissan Hyundai Motor India Proposed Investment: Rs 5,000 crore Reason: Set up a second manufacturing plant beside the existing plant to double capacity to 600,000 units a year. Also develop a new small engine plant. Capacity by 2010: 6 lakh a year What's at Stake? It's right behind #2 Tata Motors, although it ranks #6 globally. India's largest car exporter (in terms of value), HMIL doesn't have a global manufacturing footprint unlike Toyota, and half of its production by 2008 will be exported. By 2010, Hyundai wants to be #5 globally. Mahindra & Mahindra Proposed Investment: Rs 1,000 crore Reason: Expand capacity at the Nashik facility for production of Renault sedan, Logan, and increase production of its own SUV, Scorpio. Develop an all-new multi-purpose vehicle, Ingenio, by mid-2007. Capacity by 2010: Approx. 2.5 lakh a year What's at Stake? Like Tata Motors, M&M needs access to technology, and the Renault tie-up will take care of that to an extent. It already exports the Scorpio to South Africa, Uruguay and Europe, but will remain a niche player. It has a current domestic market share of 6.38 per cent. General Motors India Proposed Investment: Rs 1,380 crore Reason: Set up a new, 1.4-lakh-a-year manufacturing facility at Talegaon near Pune, primarily for the small car, Spark. Increase capacity of existing facility at Halol (Gujarat) to 85,000 units a year from 50,000. Capacity by 2010: 2.25 lakh a year What's at Stake? The global #1 company is precariously positioned. In India it has just 3 per cent share, but the launch of Spark next year may increase its share significantly. GM is reportedly considering an alliance with Renault-Nissan globally, but its India fortunes will perhaps be tied to the developments at Detroit. Honda Siel Proposed Investment: Rs 920 crore Reason: Increase capacity from 60,000 to 100,000 units by 2008, and then to 150,000 by 2010. Launch a small car. Capacity by 2010: 1.5 lakh a year What's at Stake? It has less than 5 per cent share of the Indian car market, although it ranks #9 globally. But given that Honda is best-known for its fuel-efficient engines, it may be sitting in a sweet spot. A small car is what Honda needs in India. Ford Motor India Proposed Investment: Rs 345 crore Reason: Increase production to 100,000 units a year from 50,000 currently. Capacity by 2010: Approx. 1.5 lakh a year What's at Stake? Like GM, Ford is in bad shape in the US. However, its international ventures are profitable, and Ford has been more willing to launch "India-specific" cars. It has less than 3 per cent of the Indian car market, and its plans will remain hamstrung by the parent's performance in the US. Toyota Kirloskar Motor Proposed Investment: N.A. What's at Stake? A relative late-comer to the Indian market, Toyota wants to grab a 10 per cent share by 2010 (current share: 3.94 per cent). That means a capacity of at least 2 lakh by 2010. Some analysts expect the investment to be closer to Rs 3,000 crore.

That puts India in sharp contrast to developed markets elsewhere in the world. The us is the biggest market and will continue to remain so for a long time, but its growth seems to be stagnating at about 17 million vehicles a year; Western Europe is stagnant too and expected to remain so at least until next year. So, while there's an estimated 20 per cent overcapacity in the industry globally, markets like India and China are still underfed. And as car companies respond to falling profits and flat markets, they'll have even more reason to expand in low-cost countries like India, turning it into a sourcing hub of sorts.

"Our Chairman came to India and he announced that we have to get a 10 per cent market share by 2010" A. Toyoshima Managing Director/Toyota Kirloskar

For instance, half of the 600,000 cars that HMIL plans to roll out by 2008 will be exported. Suzuki is weighing a tie-up with Nissan to manufacture up to 350,000 cars in India that will be exported back to Ghosn's company. Its own exports added, by 2010 MUL could be shipping off more than 400,000 cars a year to global markets. So, just between MUL and HMIL as many cars will get exported as what was getting sold domestically barely five years ago. "This", declares Khattar, "is the biggest thing to happen to the Indian automotive industry. We are going to become a global destination for outsourced automobile manufacturing."

In the process, don't be surprised if the industry starts looking more and more global. For, the current stack-up doesn't quite reflect the global order. Suzuki is the market leader by far with a 45 per cent share, although globally it ranks a distant #11. The #2 is Tata Motors, which still is a one-car-platform company, if not a one-car company, and is followed closely by HMIL, rapidly moving up but #6 worldwide (as the Hyundai-Kia combine). GM, Ford and DaimlerChrysler, all loss-making and losing market share in the us, may never become top players in the country, but Toyota and Honda definitely seem intent and capable. In fact, a PricewaterhouseCoopers (PWC) study predicts that by 2010, the combined market shares of the top three manufacturers in the light passenger car market (as opposed to passenger vehicles, which include utility vehicles, multi-purpose vehicles, and luxury cars) will drop from 90 per cent at the end of 2005 to 73 per cent in 2010, with MUL seeing the biggest decline.

Playing Different Stakes

"By 2008-09, we would have capacity in excess of 225,000 units. I don't think you will be able to call us a small player then" Rajeev Chaba Country Head/General Motors India

The report may not be way off the mark. Competitive contours of the industry are already coming into relief, and it is clear what's at stake for each of the players. Let's start with Suzuki and Hyundai. When they first came to India, 13 years apart, both were relatively unknown brands, but have since been able to turn India into strategic markets for themselves. In the case of the Japanese company, MUL accounts for 12 per cent of its global consolidated revenues and close to 50 per cent of its consolidated profits and, by 2008, a third of its production capacity will be based in India too. So Suzuki will do everything in its power to keep its golden goose from getting killed. Hyundai, on the other hand, manufactures only in India, outside of Korea, China, Turkey and America. In one sense, therefore, India is doubly more important to it. How are they fortifying their positions? By building massive capacities, with an eye on exports. It's a no-brainer what this sort of scale and marketing flexibility will mean to the two players: First of all, by churning out cars in large numbers, they will be able to spread their fixed costs over larger units and price them competitively in the domestic market.

Should there be a slump in car sales in India, they'll be the last to get hit, since they'll have the export market to cushion the blow. The others may have to drop prices and suffer losses. So, if Khattar and Lheem don't seem ruffled by the PWC study, it's possibly because of this reason. After all, by 2010, when sales double to 2 million, Maruti and Hyundai combined will have a capacity of 1.6 million.

"We will not change the paradigm of the car. But we do hope to change the way people buy cars and make them more affordable" Ravi Kant Managing Director/Tata Motors

At the other end of competitive spectrum will be the two Indian players, Tata Motors and M&M. Despite the initial hiccups, the former's indigenously-developed small car, the Indica, proved to be a big hit because it was the only diesel car in its segment. To be sure, MUL did try to dislodge Tata Motors from its perch with a diesel Zen, but the move failed because of the Zen's more expensive pricing. Now, however, it is planning to hit back with a force that may knock Indica's breath out. Suzuki's snazzy Swift is about to hit the market in a second avatar, as a diesel car, rolled off the Manesar plant. It is anybody's guess if the diesel Swift will sidetrack the Indica, but it is obvious that it is something Tata Motors needs to worry about.

But there are two reasons why Tata's passenger car business may not roll over and play dead: One, in an investment that's even bigger than Suzuki's at Rs 10,000 crore, the company is upgrading its entire range of vehicles-from the Indica to SUV Safari to 40-tonne commercial vehicles. At the Pune engineering centre, work is already underway to develop new platforms and a superior, common rail diesel engine. Two, and this is something close to Chairman Ratan Tata's heart, is the Rs 1-lakh car. The company is already testing several prototypes and scouting for a manufacturing location. Tata has promised to roll it out by 2008, and even if it is not exactly priced at Rs 1 lakh, it could be a game changer. It could move thousands of two-wheeler owners to a four-wheeler. Initial estimates put the annual demand at a staggering five lakh. "Will we change the paradigm of the passenger car? No. But we do hope to change the way people buy cars and make them more affordable," says Tata Motors' Managing Director, Ravi Kant.

Maruti, which hasn't phased out the entry-level small car, the 800, for precisely such a day, may prove to be Tata Motors' nemesis all over again. But the latter has some aces it can play. When Tata and his counterpart Sergio Marchionne of Fiat inked a deal back in January this year for the Italian vehicle maker to leverage Tata's distribution network in India, many aspects of the deal were left open, with both men preferring to state that "all options were open." One option that was evidently open was the possibility of Fiat and Tata setting up a joint manufacturing plant in India and evidently (even though the deal has not been signed as yet) the two companies are looking at setting up a joint-plant at Ranjangaon near Ahmednagar. "If, and I wish to highlight 'if', such a plant gets built, we will look at using some capacity from that plant", says Rajiv Dube, Senior Vice President (Passenger Cars), Tata Motors. "Maybe 30,000 units a year could be Tata vehicles." He even confirmed the possibility of the Tatas' leveraging Fiat's diesel engine technology. "Even though we have developed our own in-house common-rail engines for the Indica, the Fiat brand will obviously help us," says Dube.

CARS ROUND THE CORNER More than a dozen cars will be launched by the end of next year.

Driving in: BMW and Logan (top) 2006 Maruti's New Zen 1.1 litre petrol engine (shared with the WagonR) Expected price: Rs 3.5-4 lakh Maruti Swift Diesel 1.3 litre diesel common-rail engine Expected price: Rs 5-5.5 lakh Hyundai Diesel Sonata Embera 2.2/2.4 litre diesel common-rail engine Expected price: Rs 15-17 lakh Chevrolet Aveo UVA 1.2/1.4 litre petrol engine Expected price: Rs 4.5-5.5 lakh Ford Fiesta CNG Factory-fitted CNG conversion Rs 30-40,000 more than standard models 2007 Mahindra-Renault Logan 1.5/1.6 litre petrol/diesel engines Expected price: Rs 4.5-6 lakh Chevrolet Spark 1.0/1.2 litre petrol engine Expected price: Rs 3-4 lakh Maruti Sedan (Esteem/Baleno replacement) 1.3/1.5 litre petrol engine/1.3 litre diesel Expected price: Rs 5-7 lakh BMW 3/5/7 Series (made in India) Range of engines: Expected price: Rs 20 lakh (3 series) Rs 35 lakh (5 series) Rs 70 lakh (7 series) Skoda Fabia (hatchback/notchback) 1.2/1.4 litre petrol/diesel engines Expected price: Rs 5-8 lakh Ford Mondeo (replacing current model) 2/2.5, petrol/diesel engine Expected price: Rs 15-18 lakh Hyundai Getz Diesel 1.3 litre diesel engine Expected price: Rs 5-5.5 lakh Fiat Grande Punto 1.2 litre petrol/1.3 litre diesel Expected price: Rs 4-5 lakh

At the least, Tata Motors is no push-over. It acquired Daewoo's commercial vehicles business in 2004, and exports 20,000 Indicas and 30,000 trucks every year to countries in Africa, Europe and neighbouring saarc countries. And that's the sort of strength, the other home-grown automotive major, M&M, plans to get to. It's on the verge of launching the Renault Logan (even though the car is actually a Dacia Logan, a Romanian subsidiary of Renault), and is developing an all-new multi-purpose vehicle, codenamed the Ingenio. After the roaring success of the SUV Scorpio, developed on a shoestring budget of Rs 600 crore, no one doubts M&M's engineering prowess anymore. But Pawan Goenka, Managing Director of M&M, knows better than to rest his ambitions on a sedan, and especially one not built by his company (although the engineering involved in converting the car from left hand to right hand drive was done in-house by M&M). So Ingenio will be important for M&M. "I can't tell you anything about it at present," says Goenka. Still, it will be some time before M&M even gets to where Tata Motors is at present.

Mind The Japs

"It's not easy making a factory. But what to do, I need the cars that the new factory will make" H.S. Lheem CEO/Hyundai Motor India

What the two Indian players, and even the little Japanese and the big Korean, need to fear are Toyota and Honda. But first, a quick look at what the Detroit giants have planned for India. After years of putting China ahead of India (no surprise; Chinese buy 2.2 million passenger vehicles a year, compared to the 1.1 million bought by Indians last year), they have started taking the democratic market more seriously. Ford's former CEO, but current Chairman, Bill Ford came down to India in late 2005 to launch the Fiesta, a car that has transformed the car maker's fortunes in India (its growth has doubled so far this year). Says Ford's India boss, Arvind Mathew: "We could and should have done better in India, and I believe that for a few years after the Ikon, we had a very limited product portfolio. We should have had another vehicle; we should have launched something around 2001."

Its compatriot GM hasn't lacked new launches, but unfortunately they have all been in segments where there are limited volumes. But in August this year, GM announced a $300-million (Rs 1,380-crore) investment in India, just days after declaring a $1.1-billion (Rs 5,060-crore) loss globally for the second quarter. The money will help set up a new plant to manufacture a slightly reworked version of the former Daewoo small car, the Matiz, which has been renamed the Spark. "We have already begun constructing the new plant at Talegaon," says Country Head Rajeev Chaba, adding that by 2008-09, GM would have capacity in excess of 225,000 units. "I don't think you will be able to call us a small player then," he says.

Maybe not, but GM and everyone else included, will have the stars of auto industry, Toyota and Honda, to worry about. "Our Chairman (Fujio Cho) came to India and he announced that we have to get a 10 per cent market share by 2010," says A. Toyoshima, Managing Director of Toyota Kirloskar Motors (TKM). "And that is our target," he says without batting an eye lid. In the same breath, Toyoshima, who's now spent two years in the country, says that it would mean moving into the "volume segment", which is small cars. "Since it is already 2006, we will have to enter the volume segment fairly soon," he says. Typically, Toyota is tight-lipped about its plans, but there's no doubt that it will have to cough up large investments. The annual capacity at TKM's Bidadi plant near Bangalore is a meagre 50,000 units, including Corolla, Camry and the Innova. While there is room to expand at Bidadi itself, it is possible that Toyota decides to set up a new plant elsewhere with a capacity of 200,000, which is what would count as a viable scale for a small car. But what small car will it be? Toyota, of course, isn't telling, but industry watchers expect it to be a new platform that Toyota is developing for markets like India (the engine size will be between 1-1.2 litre to take advantage of India's Excise structure) Experts also estimate the required investment in a new plant of this size at between Rs 2,000 crore and Rs 3,000 crore.

THE COMMERCIAL VEHICLES SURGE With the economy on a roll, truck sales are clipping.

In high gear: Commercial vehicle sales are up 38 per cent and rising Sanjiv Bajaj, executive director (Finance), Bajaj Auto, told a group of investors in a Manhattan hotel recently that the company was seriously exploring the 'four wheel' option. But by that he didn't mean a passenger car. Instead, he was talking about light commercial vehicles like the Tata Ace. Italy's Piaggio, which runs a small three-wheeler operation in India, plans to do the same thing. In Germany, Anton Weinmann, Managing Director of MAN Nutzfahrzeuge, says that he wants his new joint venture in India with Abhay Firodia's Force Motors to power his company's exports. DaimlerChrysler decides, after years of mulling over it, to finally launch its commercial vehicles in India. American giant International Trucks also goes for the JV route and ties up with a resurgent Mahindra & Mahindra. Even Hyundai Motor India's Managing Director H.S. Lheem looks wistfully at the commercial vehicles market. Why? The segment grew 10 per cent last year and has soared another 38 per cent so far this year. But any company that wants a piece of the trucks market must first contend with Tata Motors, which controls a whopping two-thirds of it. "When we launched the Ace in 2005, we created a whole new segment in the commercial vehicles market," says Telang P.M., Tata Motors' Director of small and light commercial vehicles. There's no doubt about that. But as companies rush into the market, they will do well to remember what happened after the last commercial vehicle boom in the late 90s. Warns a Mumbai-based industry analyst: "Even though the economy is doing well and the market is growing, no one should be too exuberant." It's a message worth listening to.

If there's any car maker in the world the industry has learnt to take seriously, it is Toyota. So, if you are a serious player, then you have to have matching strategies. And the Takeo Fukui-led Honda is a serious player. In fact, despite being the smaller of the two players, Honda is larger than Toyota in India. Its Accord and newly-launched Civic cars outsell Toyota's competing models (the Camry and Corolla). When Honda's Chairman Fukui came down to India a few months ago, he declared Honda's hand by saying that the company would invest $300 million (Rs 1,380 crore) in India. Of that, almost $200 million (Rs 920 crore) would be invested in Honda Siel Cars India, reveals M. Takadegawa, who oversees all of Honda's interests in India (including two-wheelers and portable power generators). For starters, the company is doubling capacity to 100,000 cars by the end of 2007 and plans to take production up to 150,000 by 2008. "The first jump in production would easily cover our current line-up, but any further increases especially the one to 150,000 would mean that we will have to think of a volume car (small car). I can tell you that it will not be the Jazz/Fit, but it might be a model that is still being developed," reveals Takedagawa.

Too Good, Too Soon?

No push-over: Tata Motors is investing in new platforms and a common-rail diesel engine, besides a small car

Compared to Suzuki, HMIL and Tata Motors, the plans of Toyota and Honda may seem modest. But don't forget that these two companies are best known for making cautious, but carefully calibrated moves. Other auto companies would do well not to see everything through rose-tinted glasses. While no one doubts that the market size will top 2 million by 2010, there are enough potential pitfalls. "...challenges include inconsistent government policies at the state level, low levels of investment in product and technology development and relatively strict emission regulations..." the PWC report says. Adds Sachin Nandgaonkar, automotive analyst at The Boston Consulting Group (BCG): "It is clear that customers have money to spend, and while the fantastic numbers of the first part of the year (20 per cent growth) are clearly unsustainable, 10 per cent year on year growth over the next few years is quite achievable."

However, he does believe that a lot of the numbers being bandied about might be posturing. "While the auto sector is going to remain a prime investment destination, it is not a 1-0 game. It is not as if someone will invest a thousand crore or nothing at all, this is not a crore by crore business," he says. What that means, he explains, is that while the big manufacturers have seen several white spaces in their line-up, they have also seen opportunities in India as an auto-hub, besides feeling the need to protect their turf. "Some of the numbers might be intimidating to rivals and that's why they have been announced, final figures may be smaller," says Nandgaonkar.

At any rate, the investments are unlikely to be vastly smaller than the ones proposed. As far as one can see, there are millions of Indians who are waiting to buy cars. The twin force of growing affluence and the industry's move towards small cars could just make the market explode. And as they say, as long as the wheels keep turning, the money will keep churning.