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Old 3rd November 2011, 12:07   #121
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by amitg79 View Post
Very relevant thread.

Yes, car companies sometimes seem unusually myopic when it comes to launching some products.

The Kizashi from Maruti is the biggest example here. Average sale of 37 cars / month = nearly non-existent.
Absolutely correct, Kizashi is really a no brainer to get into the league of duds. A fully imported sedan would be naturally overpriced beyond its real value due to the import duties levied in our land. Moreover even if a company would launch such a vehicle as a flagship model or direct import, it should have the brand value to get people sign the cheque.
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Old 3rd November 2011, 12:08   #122
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by GTO View Post

I think the Dzire has decent interiors for the price it sells at. However, overall, I think it's an extremely average product and there are better at the price. But they don't have Maruti's brand, trust, after-sales or even engines.
Like Fiat, people likes to debate on Dzire as well. It is a market winner for last 3 + years and still dont have competition. Etios was not that successful after diesel also, Manza is good but limited people trust it & Verito, Accent are no where near in the race. As you said, Dzire has definitely better interiors than others in the class, reliability is very high, FE is good (Recently i got avg of 18 with AC on bad highway for my Petrol Dzire), A$$ is best, spares are very reasonable and it has better engine than others for sure. It has proved as a market winner, so why debate? Dont know why people keep saying something about it all the time. Also i guess its one of the most profit making product for Maruti as well.
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Old 3rd November 2011, 12:45   #123
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by GTO View Post
It's obvious that most, if not all, of the following manufacturers have a deep understanding of the Indian car market. After all, they have had the blockbuster product or two. There is no denying the talent either; large auto manufacturers have some truly bright brains at the top, and usually hire the smartest out there. Plus, their research, marketing & advertising budgets run into several crores of rupees.
.
Excellent !!!

Rated 5 stars just for bringing up this topic out in the open!

Yes, I have always wondered - "What were they thinking" !

Not even 1 employee throughout the chain from the top-execs to some guy lower down the ladder - ONCE open his mouth or write it down in a sealed anonymous letter & say .... What the hell !?

Prime cases that I agree to :

Aria, Jazz, Yeti.

I love these cars. Me & a couple of close friends - always wonder - how could they do this!



Kizashi! ...

My Dad & Me - we have a challenge going on - who manages to spot the maximum number of Kizashi's on road & show the other !



Fiesta & Logan : Could have been game changers - yes they did change the game - but like a reverse swing !


Renault - COMPLETE idiots. I have serious doubts that probably their top level executives are 'rejects' from other companies or NOT Indians.
They could not have been more STUPID.


May I dare to add :

Nissan Sunny.

I know its only been a few months -

But I think GTO too had mentioned in his review - that despite it being based on same platform as Micra & knowing the fact that 80% of Micra sales are the Diesel variant - yet the launched the Sunny in petrol option & not diesel!

& yet - their top-end petrol price OTR is almost equal to Tata Manza DIESEL Elan top-end pricing.


Another Car which reminds me of 'What were they thinking' - is
The Maruti Suzuki Zen Classic / Vintage edition.

If Anyone remembers that car ...

A car which is loved for its modern looks (then) sporty & young - you try to give it a vintage look !?

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Last edited by GTO : 3rd November 2011 at 16:44. Reason: Please do NOT use inappropriate language, even indirectly
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Old 3rd November 2011, 13:21   #124
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

This thread just goes to show how all the assitance and research that sales & marketing teams have to themselves do not allow for objective decisions.

Things that we call can see are at times clouded under stacks of documents and consumer feedback but what if the questions being asked were wrong?

Am sure there must be a lot of jobs lost and agency contracts thrown out of the window post such fiascos. And if not then the company will repeat the error once more and we can keep watching.

Then on the other hand there are also cases where the companies have tried hard but India has too much of a block against the brand and preception kills the product inspite of the superb value that it presents - Fiat cars and even the Nano are a case to point of the opposite effect.

Aria is too initial for TATA and the company can still do things to correct the proposition it brings to the table to attain decent numbers but M&M has scored a goal on TATA to add to it's self goal. I guess the Merlin will be their next immediate challenge and if they do that well and tweak the Aria value proposition a bit better then it can gain momentum. If only marketing guys outside the company too are consulted seriously and not by the marketing team itself.

Yeti was expected to be priced the way it was. It is essentially a Laura on stilts and there is no way they could have priced it any better. But then it just is not suitable for India and they have erred in bringing it here at this price point if they could not do better.

Jazz as simply Honda getting too greedy and over extimating the Honda brand equity in India. - It is a quality product but from Japan not Germany so needed to be reasonably value for money.

Renault - What are they thinking - Why do they even bother. They keep introducing cars that just can't match the market expectations. And now that F1 has been to India hope for us to imagine their cars to be mini Ferraris. If that worked then Fiat would not have done so badly - tough a lot better than Renault.

Kiza.. can't ever spell it right - Maruti? But then they do charge a premium for even the Swift so is is not a premium small car. Yes it does get a brand premium in the small car segment compared to TATA but obviously not as much as say a Honda or a VW or even a Skoda. They yet do not have a car in the 8-15 segment and just decided to skip two segments higher a tough ask.
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Old 3rd November 2011, 13:52   #125
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

Quote:
Originally Posted by Dr.Suraj View Post

Another Car which reminds me of 'What were they thinking' - is
The Maruti Suzuki Zen Classic / Vintage edition.

If Anyone remembers that car ...

A car which is loved for its modern looks (then) sporty & young - you try to give it a vintage look !?
Absolutely. I could not understand who brought out this idea of Vintage looks. ZEN MH410 & ZEN (LX/VX) were one of the best looking hatchbacks.

So far I have seen only one New Fiesta after the launch and that too in the SC.

If the manufacturer misses the boat initially, it is extremely difficult to pickup sales even after massive discounts.
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Old 3rd November 2011, 14:35   #126
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by ACM View Post
They yet do not have a car in the 8-15 segment and just decided to skip two segments higher a tough ask.
Spoke my mind on this! Interestingly, does anyone have an answer as to why they don't yet have something in 8-15 segment? If they think SX4 is a rival of City/Vento etc. just because it is dubbed as a C segment sedan, then I must take pity on the officials at Maruti. They must exploit the C/C+ segment by launching something smart and sleek. There will be lots of takers.

Kizashi should've been positioned in the Civic/Corolla segment. I can bet that it would've dented the current Corolla sales, there's nothing to dent of the current Civic sales anyway! :-)

Excellent thread by GTO!
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Old 3rd November 2011, 16:28   #127
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

This thread has raised a vey valid.

Another addition to this list is Ford Fusion. A good concept, let down by weird initial pricing.

I think top mgt of every car company should go through this thread before any new launch (and pay some consultancy fees to team-bhp, and it could be in form of pricing their products properly ).
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Old 3rd November 2011, 18:56   #128
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by phamilyman View Post
My point is simple - the auto sector salaries are such that the medium/long term retention of the bright employees doesn't really happen nor can they attract the very best talent (UNLESS the guy's a petrolhead).

Like I said - I have 10 odd examples. I've now added behemoth saab and two of my ex-colleagues into the list.

That's what oxyzen said as well. Now I'd much rather leave this kinda point to be reflected upon by someone like behemoth whose been there, and is now doing other things.

Therefore the blanket statement that "hire the smartest out there" is just not true. Ask anyone you know whose in engineering or industrial design. Is it like computers (say ten years back) when the best guy of any branch wanted an IT/coding job. no!!
Ok I hear you now but then again these are twio different sides or probably the same coin. One would think that these companies with their big pockets would be hiring great talent which again is probably true, the other side is that the really good ones may not stick around given the Pay or limitations that they have in doing their jobs properly.

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Originally Posted by SPIKE ARRESTOR View Post
Interesting, UG or PG?



There is no doubt that BD is auto passionate, in fact I feel Petrol head is an understatement in his case.

See his posts below, he is is implicitly hinting something in some of his posts, you are smart enough to make that out, read carefully the bold part. It will not be right from my side to comment more and I doubt he will comment (considering his position now).
He is a BTech from IITB

Yeah I understand now, its probably not easy for a good technical guy to be able to suggest/design/propose something good & not get it overruled by the powers that be.

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Originally Posted by SPIKE ARRESTOR View Post
If you still have doubts on my statement, you can cross check with your (cousin/brother) who is employed at Nasik, he will tell you things in more detail. :-) (You must be wondering how I know this-- that is Spike Arrestor for you)

Spike
Actually I am not surprised & I think I know how you know I have no doubts on your statement so I don't need to ask my cousin & anyways we rarely talk about work (either his or mine)
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Old 3rd November 2011, 20:41   #129
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

I was speaking to some folks from Renault whow were visiting NCR for the FI race preparations. You folks will be surprised to know that they were very happy with the Koleos sales as they had sold the entire loto of 150 cars they had imported .

They have their hopes riding on the pulse. They would also need to work on the dealer network.

A very apt thread GTO. A car purchase has a heavy element of emotion involved.Unfortunately, excel sheets do not capture this. Moreover, passion cannot be learnt. Most folks on the forum are here because they are passionate about cars. They have their eyes and ears pick up the the nuances which a guy with a 9.00 to 6.00 job just cannot hope to do.

A lot of companies fall in love with their own exhaust and miss the woods for the trees. Top management in a lot of companies is composed of yes men and Auto companies are no different.

Let us hope that these case studies are analysed it business schools so that we get more professional people in the Auto companies in future.
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Old 3rd November 2011, 20:54   #130
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

anybody remember the launch price of Civic Hybrid and blind Honda fans actually buying it.

After few months they reduce the price by upward of about 7 lac.

Thats loosing the customer's touch at best.
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Old 3rd November 2011, 21:04   #131
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by Technocrat View Post
Great thread GTO,

We do wonder from time on products like these as if the company put any thought process to the pricing or not.

They do, but who has the last word is what matters

I am not sure what you are trying to prove here, GTO mentioned that companies Usually hire the best out there whether they remain in the company or stick to it is a separate issue. I personally know an IITB friend of mine who is with Maruti for the last 8-9 years & I am sure there are more like him.

This is more like a case study for us non MBA types to ponder why Duds like these happen & we have got some interesting views so far.
If MBA's were that great in running a company, Microsoft or Google would not happen. MBA gives you tools, but management is more than just knowing tools. It what to do when and at what cost that matters.

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Originally Posted by phamilyman View Post
My point is simple - the auto sector salaries are such that the medium/long term retention of the bright employees doesn't really happen nor can they attract the very best talent (UNLESS the guy's a petrolhead).
Why Automobiles. This phenomenon is there industry wise. A young graduate will try to maximise the earnings, and go to who pays the most, as long as the working conditions are comfortable. To get best of talents; whether in a house hold servant or in a technocrat or a manager; you have to pay at or above the competition, else barring a few dedicated individuals you will be left with the dregs.

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Originally Posted by Behemoth View Post
Thanks Phamilyman, I do agree wholeheartedly to this!
When young engineers passed out of colleges 14 years back (my time!), their aspirations where usually strong for the auto industry and there was a time when even in terms of salary and exposure these employers were considered very prestigious. Once in the companies, these young aspirants realize that their career growth path in the organization depends on the number of years with the organization and they cannot opt for an accelerated career. Many of the aspirants then start preparing for Masters / international studies and then eventually leave. The companies lose their human capital which they had tried very hard to develop. Surprisingly, the companies are aware of this , and are happy to retain even just 20% of their young talent after 4 years.
Some of the young aspirants do also rejoin the same organizations as lateral hires at senior levels eventually.
The challenge which the large organization face is that they are not able to encourage and leverage the talents which these young people had brought, as they value years of experience more than innovative ideas. With more Korean / Japanese / German players coming in the fray, the scope for innovation is smothered, as these companies do not empower young teams for innovation and rely more on experienced people.
One of the exceptions to this is the Mahindra XUV design team, which consisted of younger people, led by an expat young lady - this is why the XUV design has come out so radical and pathbreaking. On the other side, if you see Tata Aria (production version), the design was an extended / inflated version of the Indica Vista and did not generate any Wow factor.
The flipside of young vs old design teams is that with a young team, the pitfalls are higher and the customer may end up becoming a guinea pig for product improvements, whereas this is less likely in case of a product designed by an experienced team.

The other side of the story is the marketing angle. Most companies are now "Marketing what they produce" and not "Producing what they can market"!

Regards,
Behemoth
A lot of young engineers and managers start life with a holistic view of life, pursuing a career which would enable then to do what they love. Some where down the line, they realize that the world is totally different and their brilliance and dedication has almost no bearing on their career path. That is when they usually change company and then the industry, lost to their original industry for ever.

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Originally Posted by GTO View Post
When we are talking about pricing strategies, the fresher IIM grad with his minimal experience & understanding does NOT even come into the picture. Do you think hiring amongst corporates only happens at campuses for freshers?

Smartest? Indeed. Look up the profiles of the management at Maruti, Tata, Hyundai, Toyota etc. and you'll agree that they are indeed the "smartest out there". Therefore, I'd appreciate some more inputs on how these smart folk missed out on what is obvious to laymen like us.
My replies in bold.

GTO. Ever wondered how come the IAS (or CPWD etc) candidates who overcame one of the most competitive process, transform to a pretty average technocrat after 20 years of service, more proficient in maneuvering and infighting rather than in running the country?

Last edited by GTO : 4th November 2011 at 11:21. Reason: Please do NOT type your answers in BOLD. It results in an eyesore, thanks
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Old 3rd November 2011, 21:22   #132
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

A friend owns the Yeti. First I failed to recognize it, but after a ride, it definitely is quite a brilliant handler. He says that although its expensive, it does what he wants it to do, so he's fully satisfied with it.
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Old 3rd November 2011, 22:39   #133
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

on a side note, let me give you a thought i heard from a friend whose a really big shot fellow, which may give an interesting angle to the standard bemoaning of yes-men that we all feel.

He once said that there is a fine line between initiative and indiscipline and its often the bright folks who miss it.

Yes, he's speaking from the other side of the table but its a different perspective to chew on.

If you look at it - Apple succeeded because Steve Jobs' built up a company full of yes men (or folks who thought like him) - folks who brought his vision to life. (again mostly news articles i've read, so no personal experience there). So are companies like the Jindals, promoter driven and doing very well.
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Old 3rd November 2011, 23:58   #134
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

i agree with most of the point especially in case of Aria and XUV, however i feel the Aria's interior as per my friends are better than XUV, may be it lacks on features, i also felt its overpriced. However, sometimes companies have to buy stuff from other companies for example i feel Maruti Swift is overpriced in diesel version for what it offers compared to punto or beat diesel. May be because maruti has to buy engines from Fiat, but still swift sells in huge numbers. I feel its about product brand image in that segment.

I find X1 a totally useless car for its design but friends at BMW tell me it is selling good numbers. I think its more about brand image in a segment. If tata had rover branding on Aria i feel it would have sold more numbers, Mahindra built that premium image slowly which TATA never did.

The whole pricing stuff starts from how you build a brand.
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Old 4th November 2011, 10:06   #135
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

Not all SRK movies are hits,
Not all matches which sachin plays ends up victorious,
Not all products or services can be a hit,
Wrong decisions are made because of bureaucracy in decision making, over optimism, champions (top guys without common sense) calling shots, etc....not to forget greed of companies to make more out of less.
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