Go Back   Team-BHP > BHP India > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 2nd September 2011, 19:23   #16
BHPian
 
Join Date: Jun 2010
Location: Toronto
Posts: 189
Thanked: 131 Times
Default

On second thoughts it would be fun to see the lauretta priced in the dzire, manza range. That would help draw a clear line between it and the vento.

I also think a lot of people who are not enthusiasts may not look at skoda and vw like we do. So yeah as someone said, the board might be ok to sell any car from the group.
HKap is online now   Reply With Quote
Old 2nd September 2011, 19:30   #17
Team-BHP Support
 
.anshuman's Avatar
 
Join Date: Dec 2004
Location: Good-Gaon
Posts: 7,708
Thanked: 8,929 Times
Default Re: Is VW confused about their strategy in India?

Quote:
Originally Posted by HKap View Post
On second thoughts it would be fun to see the lauretta priced in the dzire, manza range. That would help draw a clear line between it and the vento.
Do you really think this is feasible? Why would Skoda price the Lauretta in the same price range as top end fabia? Expect little difference in Vento vs Lauretta pricing, on the same lines as Polo vs Fabia.
.anshuman is offline   Reply With Quote
Old 2nd September 2011, 20:00   #18
BHPian
 
Maverick1977's Avatar
 
Join Date: Aug 2007
Location: Mumbai
Posts: 832
Thanked: 249 Times
Default Re: Is VW confused about their strategy in India?

People in European countries are ready to pay slightly more just for the Badge. This is the reason why 2 cars which are identical in every way but with a different badge sell there. India on the other hand is a very different market. People look @features, @pricing then at the brand name especially if the car is from the same parent. I have many times heard sales people in Skoda showrooms boast that the Fabia has the same engine et al and is even better priced than the Polo (when quizzed if Polo is better).
However one thing is sure - VW are here to stay & stay for long. Why?
Just look at the amount of money they are spending on advertising. Wonder how much they have spent on all the innovations in TOI & Hindu
Outdoor advt is there in all major cities
Radio advt on all major stations times and again
Their online presence is quite thin contrary to expectations.

This is a clear sign that they foresee a great future here.

P.S. I dont work for VW
Maverick1977 is offline   Reply With Quote
Old 2nd September 2011, 20:17   #19
mxx
BHPian
 
Join Date: Jan 2005
Location: Bangalore
Posts: 682
Thanked: 101 Times
Infractions: 0/1 (5)
Default Re: Is VW confused about their strategy in India?

In every market where both vw and skoda is sold there is overlap in pricing. But, they are positioned differently. vw is a more hip, youthful, sporty brand. Skoda is known to be more practical. vw is also marketed as slightly premium. The lines have been blurred -not deliberately- in the recent years. Eg: lets take passat and superb. A person who drives will go for passat, whereas superb caters to rear seat passengers and versatile luggage space . In India there is a problem that most people with 30lks will be on the back seat-hence superb is more popular. BTW, when I say this, passat is just launched so it is not possible to certify the previous statement yet.
Also, in India vw is a late entrant, skoda already established brand. Re-positioning takes a long time. IMO, it is too early to analyse the outcome of vw strategy. This should be done 5-6 years down the line.

And nowhere is the world does vw say skoda is a vw brand. VW had done a lot of ads here in India, sometimes on every page in a days newspaper, introducing people to its heritage. I havnt seen skoda mentioned even once, even thought skoda is perceived to be premium brand here. For the same reason you will be surprised how many people dont know about skoda - vw link atleast in India.

And bringing Audi - which is a premium luxury brand - into this discussion is stupid. Very small number of people who decides to buy one of the german trio models, will scale down to superb or passat if finances are in place. Audi has a specific place in the market -or atleast peoples minds- which wont be affected by vw or skoda
mxx is offline   (1) Thanks Reply With Quote
Old 2nd September 2011, 20:21   #20
Senior - BHPian
 
oxyzen's Avatar
 
Join Date: Feb 2010
Location: Not fixed.
Posts: 1,026
Thanked: 265 Times
Default Re: Is VW confused about their strategy in India?

There are 2 well known facts
1) Skoda and VW will both share same engines - Cost reduction.
2) They will not share dealerships - That will be a disaster.

The fact is VW is happily selling 3000 units of Polo while Fabia is stuck at 600 even after the price cut. That too when the interior quality of Fabia is a shade better and feels more premium with the extra bit of space. The only Advantage that VW has is, it has got better looks and it does not have that bad A.S.S reputation. So this is where they can relax for the time being.
600 units of Fabia is not going to make a dent in VW's sales anyway.

Moving up the ladder, the Laura and Superb are far batter packages than VW offering. They are more VFM (specially superb). The Laura offers more features. And that is where I believe Skoda will rule. VW has to work on its product positioning here. Offer something that Skoda does not. Like a Jetta with a sports Variant. (17' wheels, stiffened suspensions, etc ). But it is Skoda who is coming out with the RS. Pricing the Passart in the Audi territory is just wrong. Jetta may still work with VW but the Passart. Hell no.

I think they need to do the following just to be different.
- Position Skoda and VW like Ritz & Swift (Wagonr & Astar). Skoda can be for a Family guy. Good on space, practicallity, a bit cheaper etc. VW more in an aggressive and sporty stance. Look how well MSIL has positioned both of them.
- A.S.S Skoda is the worst. VW is not doing any good here. But this can by far be the differentiating factor between VW and Skoda. It is something that needs work without any second thoughts.
- Stay away from the Audi pricing. Keep it close to Superb and offer the Buyers something different. The Huge wheelbase of Superb is not something for the Hardcore enthusiasts. the Passart could very well have filled the void.
oxyzen is offline   Reply With Quote
Old 2nd September 2011, 20:33   #21
Team-BHP Support
 
Vid6639's Avatar
 
Join Date: Jul 2006
Location: Bangalore
Posts: 14,468
Thanked: 19,375 Times
Default Re: Is VW confused about their strategy in India?

Quote:
Originally Posted by mxx View Post
And bringing Audi - which is a premium luxury brand - into this discussion is stupid. Very small number of people who decides to buy one of the german trio models, will scale down to superb or passat if finances are in place. Audi has a specific place in the market -or atleast peoples minds- which wont be affected by vw or skoda
Why is it stupid mxx? Your are saying exactly what I am saying. If I was looking for a 30L car why would I even look at the Passat which costs the same as the Audi A4. I would go for the Audi right and not even consider the Passat.

The Audi is part of this discussion because the VW Passat costs as much as the Passat and not lesser which it should have. A person who wants to drive will not choose the Passat because he is getting the A4, BMW 320d and X1 which are better driver oriented cars for lesser.
Vid6639 is offline   Reply With Quote
Old 2nd September 2011, 21:27   #22
Team-BHP Support
 
ampere's Avatar
 
Join Date: Sep 2009
Location: Bangalore
Posts: 15,601
Thanked: 8,591 Times
Default Re: Is VW confused about their strategy in India?

Nice article/thought/analysis @viddy. I only used to think about it. You
have penned it perfectly.

Another angle to this issue:

If they also perceive (VW as a brand) to establish as a volume brand,
what have they done to address dealer network, after sales and curbing
production delays of their flagship volume offerings? viz. Polo and Vento.
ampere is offline   Reply With Quote
Old 2nd September 2011, 21:35   #23
BHPian
 
ethanhunt123's Avatar
 
Join Date: Aug 2006
Location: Bangalore
Posts: 866
Thanked: 239 Times
Default Re: Is VW confused about their strategy in India?

Nice points. The biggest issue with VW is that Skoda has established itself as a premium brand before the entry of VW. In other countries, Skoda was never seen as premium but similiar to what Maruti/Hyundai are in India.

Solution to this? Probably as and when Skoda is launching newer models - strip them down and offer only Classic/Ambiente versions. If you want premium features, you have to buy the VW cousin in HL trim. But then this might backfire and it might end up loosing customers who think Skoda is turning cheap and VW is too expensive

I know one place where i dont want to be - VW's marketing deptt !
ethanhunt123 is offline   Reply With Quote
Old 2nd September 2011, 22:36   #24
BHPian
 
2cents's Avatar
 
Join Date: May 2010
Location: India
Posts: 320
Thanked: 75 Times
Default Re: Is VW confused about their strategy in India?

Skoda had already established a premium name that VW should've got.
If VW wants to position itself above Skoda, as it is everywhere else, and still not compete with it, they are left with very little space between Skoda and Audi.

The only sensible thing to do is not cannibalize into each others product space. Atleast the Vento was already available in Russia. Why on earth are they wasting time with, exclusively made for India, Lauretta (that name alone is reason enough not to bring in that product).

I think they still have a lot of game left just don't bring in competing products in the same space. Look at Yeti, it doesn't have a VW, or any other, counterpart, and simply rules its own space. Why not just focus on stuff like Tiguan or Terrago.
2cents is offline   Reply With Quote
Old 2nd September 2011, 23:53   #25
BHPian
 
djavalkar's Avatar
 
Join Date: Dec 2005
Location: Pune
Posts: 42
Thanked: 8 Times
Default Re: Is VW confused about their strategy in India?

Any idea how many units were manufactured in India and out of that how many were exported - for VW in 2008 ? They were expecting to sell over 1.4 million cars based on http://business.outlookindia.com/article.aspx?101577
djavalkar is offline   Reply With Quote
Old 3rd September 2011, 00:18   #26
BHPian
 
kaks15's Avatar
 
Join Date: Apr 2011
Location: Delhi/NCR
Posts: 173
Thanked: 50 Times
Default Re: Is VW confused about their strategy in India?

Somebody who knows the group internally can correct me if I am wrong.
IMO VW, Skoda and Audi would be operating as competitive, separate entities in any market. There might be knowledge/component sharing but on the sales front they would be operating as independent sales units attacking at the same pie.
kaks15 is offline   (1) Thanks Reply With Quote
Old 3rd September 2011, 00:19   #27
Senior - BHPian
 
architect's Avatar
 
Join Date: Apr 2008
Location: Ghaziabad, U. P
Posts: 1,274
Thanked: 443 Times
Default Re: Is VW confused about their strategy in India?

Great thread, Vid.

I have always felt VW had no strategy, especially because of Skoda (and Audi). I had an hour long argument with my Boss (a great VW fan!) and he finally did understand that except the Vento, every VW has a cannibalising competitor in its own stable. Even the Vento will not remain unchallenged within the family once the Octavia replacement come up.

I also strongly disagree with VW as to why all their cars from Rs 5 lakh to 30 lakh should look the same from the front. Isn't that taking the 'family look' thing too seriously? Even Mercedes have now managed to create some distinction (BMW still hasn't) between the various 'classes'.

Regarding A.S.S., I agree Skoda may not be known to have great A.S.S., but VW still has to be seen over a long term. As far as reliability of components (especially electronics) is concerned, the older Passat owners have reported many issues. In such a scenario, would I want to more for every VW when the Skoda is cheaper?
architect is offline   Reply With Quote
Old 3rd September 2011, 00:39   #28
BHPian
 
Join Date: Jul 2011
Location: Gurgaon
Posts: 192
Thanked: 96 Times
Default Re: Is VW confused about their strategy in India?

Quote:
Originally Posted by karpusv View Post
I do not see a problem with this strategy. Think of it as VW's group strategy. As long as i'm able to sell cars from my group, i'm fine with it.

If I sell lesser VW and more Skoda, theres no harm in it. Agreed that there is less presence of VW as a brand. But does it really matter. What if my intention is NOT to garner volumes from Phaeton, Passat or the Jetta? They are there just to build my brand and I will showcase them wherever possible and beat the trumpet of the VW prowess.

The Polo and Vento seem to be doing decent numbers. Tomorrow after the UP! Is launched, 3 years down the line they may be comfortable sharing it with Skoda to develop something similar maybe. Works fine for me. Its the overall group volimes that interests me.

Do I have a point? Just my 2C
So basically VW group comprises of the fabled 2 banana seller brothers who sit side by side and sell bananas at 20 Rs. and 40 Rs. a dozen respectively?
So that you think the 20 Rs. one is cheap and buy it, even if you can get it at 15 Rs. down the road?

And once the 20 Rs. stock runs out, the other brother transfers half the stock to be sold at 20?

Makes sense. And definitely they are tranfering bananas from one basket to another in this case -- hell they are using the same basket (platform).
chinkara is offline   Reply With Quote
Old 3rd September 2011, 02:20   #29
Zed
BHPian
 
Zed's Avatar
 
Join Date: Aug 2011
Location: Germany
Posts: 466
Thanked: 270 Times
Default Re: Is VW confused about their strategy in India?

The VW group has the advantage of owning three strong car brands in India. While the 3,5 & 7 \ C, E & S each have their own niche, they still owe a lot of their brand strength to the Beemer and Merc marques. Take the blue and white disc away from the 3\5 series or the three pointed star from E or S class and what you are left with is a weaker proposition. Which is what differentiates Skoda and Audi - legacies independent of the parent company. And what this discussion thread brings out is the fact that this does not necessarily translate a competitive advantage. Rather it points to the contrary going by the views expressed in some of the posts
Zed is offline   Reply With Quote
Old 3rd September 2011, 05:58   #30
Senior - BHPian
 
mayankjha1806's Avatar
 
Join Date: Jan 2011
Location: BLR/Gurgaon
Posts: 2,133
Thanked: 820 Times
Default Re: Is VW confused about their strategy in India?

Quote:
Originally Posted by ampere View Post
Another angle to this issue:

If they also perceive (VW as a brand) to establish as a volume brand,
what have they done to address dealer network, after sales and curbing
production delays of their flagship volume offerings? viz. Polo and Vento.
Thanks @ampere, this is exactly what i was thinking. Apart from pricing their products right they also need to focus on the dealer network. The DW on Hosur road is not even a compete showroom, Its the size of a slightly larger apartment and few models on display inside. Walk into the showroom and the attitude of Sales staff in anything but confidence inspiring.

In my view, they haven't done their homework right, testing Indian markets, investing on dealerships, periodically checking their quality of sales and service experience. It almost gives an impression of a fly-by-night manufacturer who just wants to make a quick buck.
mayankjha1806 is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
VW Group and its mega platform strategy zosoin Technical Stuff 8 7th April 2017 08:26
Aston Martin Opens their showroom in New Delhi, their 2nd Dealership in India Ace F355 Super-Cars & Imports in India 1 19th May 2012 20:59
BMWs master strategy for India - Controlled cost of ownership GTO The Indian Car Scene 22 5th March 2007 22:00
Alert against new auto theft strategy in India GTO The Indian Car Scene 7 15th July 2005 23:27


All times are GMT +5.5. The time now is 20:55.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks