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Old 8th March 2012, 14:28   #16
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

You know, I think that the references to "bad" after sales reputation that I keep seeing here on the Forum, are a bit over-hyped.

Yes certainly a high Quality + VFM product offering is a good key to success. I would also say that the understated, yet elegant looks too play a part, however small, in the case of the Rapid's success.

Quote:
Originally Posted by volkman10 View Post
Whereas in the case of Rapid, even with a bad after sales reputation the Rapid is doing great in the sales charts.

So looks like a VFM offering is the key to success and not always the bias towards a brand.


Cheers!

Last edited by GTO : 8th March 2012 at 17:30. Reason: Fixing quote
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Old 8th March 2012, 14:30   #17
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

Is the Indian car market brand biased. In one word: YES.

Is it justified. To some extent yes. The brands we are biased towards are ones which have the following attributes that the Aam Admi cares about. Reliable, good A.S.S, VFM.

That explains why the likes of Honda can get away with over pricing their products (reliable), Maruti sells (A.S.S) and Hyundai and Tata are the second and third largest sellers (VFM).

Let us accept one thing though, some car manufacturers do not market their products well enough to create their brand recall in a good way, or their initial products do it for them. Opel only went under because their products were generally seen as being expensive to maintain, which is why the GM group produces their products but under different badges in India today.

Fiat is a classic example of a car company that today could have been one of the leading lights in the Indian market but with bad decisions is selling less than a 1,000 cars a month in total by the looks of it.
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Old 8th March 2012, 14:40   #18
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

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Originally Posted by volkman10 View Post
Vento TDI is one of the best cars currently available in the C segment.
Agreed, and it isn't so much more expensive to buy than direct competition (Fiesta, Verna etc). Of course, it lacks a few gadgets. I'm not surprised that the Vento is still selling well.

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Originally Posted by kiku007 View Post
Case1: The Honda City we are talking about is a SUPER HIT ever since the first iteration landed in India until 2011. So when it's made affordable, more people are just going to buy it.

From day1 the car is overpriced and people move away. So it's not a sales super hit that you slash prices within 6 months and expect people to queue up.
Agreed 100%. The new Fiesta has (or with current sales will soon have) the tag of a market dud. With that image, price cut may not help much. Jazz is the same and I think it remains to be seen if it can climb up the charts once the initial euphoria over price cut is over. Honda had issues due to natural calamities, but it might have earned Jazz the tag of a car that's 'a dud inspite of price cuts'.
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Old 8th March 2012, 14:45   #19
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Although there can be a lot has been summed by fellow BHPians I would just add few of my understanding on two manufacturers Ford an Honda.

- Honda has been for Indians definitely of higher brand Value than Ford.
- Honda City though has a much dated looking interior still has been able to maintain the sale of its car because of higher aspirational value attached to it.
- Ford Read Mis-read the market after the success of Figo that they could bring in a successful hatch converted to a sedan with an ugly looking boot (just my personal feel). So infact Honda not only scores on aspirational value but also in looks department, though Ford Fiesta is much more loaded compared to City.
- Also an important factor is Pricing cut in case of Ford was done because New fiesta never picked up the required sales while City has already been the star performer and by doing price correction Honda has been able to provide a shot in the Arm of City to boost the sales.

Looking at Volkswagen Vento is that they have played very well in Indian market as they have been able to understand what clicks with Indian consumer.

1. Brand Value
2. VFM
3. A.S.S

Brand value and A** are the two important aspects for a company as they are independent of any car model of the company. VFM is something that can be easily copied and we can have 10 other cars offering the same package/features.

VW Has to my opinion worked on Brand image aggressively and been able capitalise on it. With Polo it will be a different story though but lets keep that out of this is discussion.
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Old 8th March 2012, 15:13   #20
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

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Originally Posted by sidindica View Post
Case study 1:

Honda city launched in 2008 priced between 7.7 to 8.90 lakhs. V models added next year and price kept on going high. Later ongoing reaction to lac of diesel engined vehicles on their stable and waning demand of petrol vehicles, the car sees a massive price drop and more discounts before the facelifted version is launched below 7 lakhs (CE edition.). Natural calamitis aside, demand shoots up and as of last month, 6000 plus vehicles shipped.

Case study 2:

The new Ford fiesta. Launched in july 2011 with both petrol and diesel engines in 4 variants each. Car is well rounded and gets good reviews from media and press alike. Ford prices the car very high. Production-demand mix confuses dealers and today, even after 1 lakh discount, the car simply has no demand... A/T launched at competitive price and in the near future, model rejig is on the cards. But still, why isn't the car in demand?

What could be the possible root causes for so much brand bias in general in the Indian automobile market?
@ sidindica
  • Honda City is a proven vehicle in most aspects and is in its 4th avatar now in India, and has always been very contemporary. Pricing as such hasn't been that much of a problem directly, as it has been with the Jazz. As you mentioned, competition, availability of other options of late in the market, absence of a diesel motor for Honda and the impact of natural calamities have impacted the City sales though. Now with the price revision, things should fall back in place for the City and the Feb 2012 sales indicate just that.
  • Unfortunately the same cannot be said of Ford.
  1. Americans for some reason behave the same in the Automobile industry as they do in other areas (be in international politics, trade or foreign affairs - they think that the world is at their feet).
  2. "Make it good, price it right and back it up" - and you still need to keep you fingers crossed and hope that all goes well. You get on of these wrong, there isn't much of hope left then.
  3. Fusion, a specific segment vehicle, but pricey attracted only select customers. Then came Figo and we all GO!.
  4. The earlier Fiesta (now Classic) was doing ok and then Ford launches the All-New-Fiesta and in a bid to do too much doesn't get certain aspects right (rearward visibility, rear seat spacing, pricing). Not many takers!!!
  5. Remember in face of stiff competition you never get a second chance. People today might perceive it as an act of deceit and become that much more cautious before putting their money on it. So much for Ford India's confidence or simply the excess of it, I think with the new Fiesta, they have lost the plot!
So to answer your question, while it cannot be denied that the Indian car market is brand biased to an extent, when the product and market strategy is good it isn't too brand biased after all.

Qualis, Figo, Polo, Beat, XUV 500 are a few examples!

Thanks,
C_
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Old 8th March 2012, 15:30   #21
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

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Originally Posted by Abhi_Automobile View Post

I think what Siddy is trying to suggest is that a 'similar' action taken by two manufacturers is met with different responses from junta. Thus, it clearly shows an Indian bias towards certain brands compared to others. And I agree...
Although I totally agree with you about brand worshipping but isn't there more to it too. For instance Honda city has always been a wonderful car to own. It looks good, reliable, fun to drive, decent FE and basically ticks all the parameters. So once the price cuts were announced it again became an extremely VFM car and the sales shot up.

Whereas Ford has messed up the launch of the new fiesta. One cannot mess the launch. I have always felt that first impression is a lasting impression. Even Honda still barely manages to sell Jazz. I don't see much excitement about it even with the price cuts since most people still carry a wrong notion about the car. The months long booking is more owning to production shut down. Also Ford fiesta looks a little quirky which may not suit the liking of many buyers.
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Old 8th March 2012, 15:36   #22
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

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Originally Posted by StarrySky View Post
Agreed, and it isn't so much more expensive to buy than direct competition (Fiesta, Verna etc). Of course, it lacks a few gadgets. I'm not surprised that the Vento is still selling well.
The Vento has no gadgets to speak of barring the climate control on the top end, newer version have steering mounted controls, the City has had them forever ,VW does shortchange the buyer upfront. The new Fiesta is around the same price of the Vento and it comes with the added advantage of not having to put up with pompous salesmen who think they are selling you a debadged Audi.

I believe the Vento will have a tough time ahead considering the success (deservedly) of the Sunny, the Jap company image has certainly helped Nissan and it will be the success story in the C segment.
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Old 8th March 2012, 15:47   #23
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

The only reason I could think of is the "time frame".

The Jazz and The City were always there, they were over priced, people knew and many did not buy (Jazz) because of the price tag, but still longed for them, so there was demand but the only hindrance was price which was later corrected and hence the success.

In ford's case, the price cut was too soon. The product was never established, no one even thought of buying it because most saw it as a good but over priced car, so there was no aspirational value, it was more like buying a liter of petrol a few months ago for 60 and now for no reason paying 75 for it. So a price cut did not do the trick for Ford.

P.S: Ford did not seem to have advertised the price cut properly, me being a Ford customer is not even aware of the price cut. Is it official?

Last edited by anilisanil : 8th March 2012 at 15:50.
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Old 8th March 2012, 17:00   #24
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

Quote:
Originally Posted by avira_tk View Post
The Vento has no gadgets to speak of barring the climate control on the top end, newer version have steering mounted controls, the City has had them forever ,VW does shortchange the buyer upfront. The new Fiesta is around the same price of the Vento and it comes with the added advantage of not having to put up with pompous salesmen who think they are selling you a debadged Audi.

I believe the Vento will have a tough time ahead considering the success (deservedly) of the Sunny, the Jap company image has certainly helped Nissan and it will be the success story in the C segment.
At the risk of being seriously OT in this thread, I would say that I had the same opinion of the Vento till I recently accompanied my friend on his search of a C-segment sedan. I must say that on the inside, Vento feels truly preminum. There's no comparison with Fiesta on that front. Fiesta has lot of gadgets, but sitting at the rear you feel you're in a lower segment car. Vento also has a great engine. Sunny is a very good car, but again the TD left me disappointed. I would pick Vento over Fiesta and Sunny (though for different reasons).
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Old 8th March 2012, 17:17   #25
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

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Originally Posted by StarrySky View Post
At the risk of being seriously OT in this thread, I would say that I had the same opinion of the Vento till I recently accompanied my friend on his search of a C-segment sedan. I must say that on the inside, Vento feels truly preminum. There's no comparison with Fiesta on that front. Fiesta has lot of gadgets, but sitting at the rear you feel you're in a lower segment car. Vento also has a great engine. Sunny is a very good car, but again the TD left me disappointed. I would pick Vento over Fiesta and Sunny (though for different reasons).
Risking being labelled a Fiesta fanboy, I was not referring to the backseat at all. The gadgets list is pretty impressive and some of the stuff is not even optional on a Vento - love those folding mirrors, the Vento is barebones and the cost cutting is in your face, sitting in the backseat in both cars is miserable(not space, just what is around you). Fiesta steering is awsome and Vento is an EPS - big difference there. The only competition in terms of features is from Fluidic top end which comes with automatic also.

The true brand master was Honda, before the petrol prices derailed the gravy train, no brand has achieved that status yet and it will take some time before Honda gets back there, if it ever does.
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Old 8th March 2012, 17:26   #26
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

Quote:
Originally Posted by avira_tk View Post
Risking being labelled a Fiesta fanboy, I was not referring to the backseat at all. The gadgets list is pretty impressive and some of the stuff is not even optional on a Vento - love those folding mirrors, the Vento is barebones and the cost cutting is in your face, sitting in the backseat in both cars is miserable(not space, just what is around you).
There is no denying that some brands are more aspirational than others. In this case VW scoring over Ford. Not trying to pick on your post but the Fiesta does look a segment lower in a few areas. I found the seats pretty cramped up, the glaring metal on the rear arm rest etc look plain downmarket. It does have a lot of gadgets but then is that enough? I am guessing not.

On the other hand Vento looks and feels premium. We haven't had any german car in the sub 10L category and the Vento was the first one ( I am talking about the sedans only). That is its biggest USP. The different feel, the "thud", the heavy doors are able to attract a lot of interest. Even then I will concede that after the initial hoopla has died down VW is finding it tough to sell it now. I didn't see any 2011 stock clearance sales from other car makers barring VW. Vento manages to just barely touch 3k units per month whereas Verna and City manage to do much more. The newly launched Sunny hasn't helped things either. I feel the low sales figures have got to do with the sorry dealer experiences, higher servicing costs and ofcourse the initial exclusivity factor having all but died now!

Last edited by drmohitg : 8th March 2012 at 17:28.
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Old 8th March 2012, 17:34   #27
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

Sid,

There is a significant difference between the two cars being compared. The Honda City was a success all through, and the market clearly *wanted* it. Competition got fiercier and the City started slowly losing out on the value proposition. The only solution = Cutting prices which worked rather well.

On the other hand, the new Fiesta flopped on launch. It was over-priced, no doubt, and the market has deemed it such. Thing is, no one really knows of the price cuts & discounts. People still think it's an over-priced car. Just look at the Jazz too; a very small % of the Indian car market even knows about the new (cheaper) positioning. Moral of the story = Price your car correctly from day one.

That apart, the new Fiesta is a very mediocre car. Average petrol engine and still limited space at the back. The only class-leading part of the car is that DCT gearbox. But there's nothing really outstanding in the Manual variants.
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Old 8th March 2012, 18:52   #28
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

One more point to consider is that Honda has done very well to give 'City' a brand image of itself. People feel 'City' is the most premium car in C segment.

Ask any of your non-petrol head relative/uncle and they will pick City over any other car.

No doubt Fiesta is the best handler but it was never as popular as City. The now on sale City will turn four year old in September and still looks as good as any other new launch.

About the price cuts - I see no price cuts from company side, it's just the discounts offered from dealer end. FYI the base model of Ford Fiesta petrol is whopping 1.5 lac expensive than CE Honda City. Ford has to officially announce the price cuts just like Honda did. They have to be bold enough to accept their fault for over optimistic pricing of their cars (Fiesta).

With this difference in pricing market will be biased even if it was reverse condition.

Ford (including others) has to do lot of hard work to compete with Honda City.
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Old 8th March 2012, 18:59   #29
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

Is the Indian market too Brand biased? It always was.
I have only one thing to say regarding Fiesta which I also posted earlier on some thread. Here in Goa, I feel people have good taste and understanding of cars as compared to other parts in the country. May be because of more NRI population. Here all cars are sold in good numbers and Fusions, etc are quite common. But despite that I have not spotted more than One white Fiesta till now since its launch. For me, it reflects some serious flaw with the car, and that is its ugly rear. Its more uglier than acceptable levels IMO. To make matters worse, look at the competition, City, Verna and not to mention Linea in the looks department.
That explains it all.
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Old 8th March 2012, 19:14   #30
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Default Re: Reaction to Price Cuts: Is the Indian car market too brand biased?

I think its not only the Indian market, but every market is brand biased. Not only in case of cars, but with anything and everything.

That's the reason everyone spends millions and millions to establish their brand and create an distinct identity for itself and it doesn't happen overnight. In this case "City" is a well established product and hence the price reduction was well received.
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