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Old 28th July 2016, 17:21   #46
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Default Re: Why car companies shouldn't move away from their core values

Completely agree with GTO here -
Own a previous generation Figo & when I checked out the new Figo, it just didn't match up - sure it's feature loaded and has got enough HP - but when I think of a figo, it's a machine having beautiful dynamics & the perfect steering for winding ghats.

If I want a hatch loaded to the gills, I'll perhaps walk into a Hyundai showroom - that's in Hyundai's DNA.
When I walk into a ford showroom, I want ford's DNA
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Old 28th July 2016, 18:46   #47
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Default Re: Why car companies shouldn't move away from their core values

Good thread here. But there are issues here especially with Japanese companies(Not just Car Companies) who don't quite get the Indian market and balance costs in wrong way. The issue basically arises from the high cost of developing technology in Japan(High Cost of Living vs south Korea) and in the race to match the koreans they have no choice but to compromise on equipment and other features to keep their generally reliable engine technology. Toyota is a very good example of this , They have tried to match lower cost of Koreans but its almost impossible to match their equipment list considering the cost of Yen vs Won. Moreover Japanese companies pride themselves on their engine tech and reliability more than their equipment lists or the package as a whole, hence the crappy Etios twins , bare Innova etc trying to keep costs down.

Honda's a different case here in that their entire made for India logic itself has issues. Moreover they have gone complete 360 from their core value which has generally been fun to drive, Very Reliable cars with good quality and low maintenance costs(Civic , Accord , CR-V etc) to now all the made for India crap which they turn out these days.
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Old 28th July 2016, 19:14   #48
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A very relevant thread!

What is clear to me is when a company stands by what it does it gains an identity that creates its brand recall. Maruti has it as cheap to buy, run and service and I doubt if they will ever be able to pull off anything beyond 15 lakhs. Hyundai can though and stands for the new age buyers who look for fancy interiors and gizmos. VW / Skoda are not doing a bad job either. With just 3 cars between them below the 15 lakhs range, they offer such a width of engines and gear box combinations! And who is the new hot hatch? It's not the Abarth punto but the Polo TSI! Not in the sense of an enthusiast, but the way VW has handled it has been fantastic! So these guys are fairly sorted although they don't have a significant market share. They will never get to where Maruti or Hyundai is, but it won't be a dream to be the best of the rest ( GM, Nissan, ford etc)

It's the other folks who are in no man's land. Nissan and GM being the worst. Nissan had a decent car, the micra but it got no where coz it stood for nothing apart from its cute looks. And the Terrano is the rich cousin of the Duster, so what could it do?
GM should just walk away. They stand no chance anymore.

Im surprised by what Ford did though. Although I always though that their cars were a little overrated, in any case they were loved by many for their involvement. And it's no longer existent! And no cars above 10 lakhs except the endeavour to spruce up its image. I always thought they offered a bit of middle road between the japs and Germans. But it's no longer so. Actually this topic applies to them perfectly!
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Old 28th July 2016, 20:09   #49
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Default Re: Why car companies shouldn't move away from their core values

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Originally Posted by arunphilip View Post
Its a case of damned if you do, damned if you don't.
I completely agree.

However, I think there will only be one core mantra left in the market in the near future. The inflexible ones, sticking to the sensory experience of motoring, will be extinct.

This core mantra will be based on blitzkrieg tactics:
1) Discombobulate and eliminate initial resistance by a continuous, massive attack of new products--like dive bombers (all sensory experiences of motoring be damned, just throw them in like lightning strikes--using elements of superficial awe and creating unnecessary segments).
2) Create deep thrust into the confusion using armoured columns (intensely oily sales tactics--Nexa coughlings, DRLs and tabs make cars better dynamically; who cares about tech specs and metal gauge when you should be playing glamorous)
3) Use the perception of superior infantry to sweep away any remaining doubts or resistance and prevent loss of momentum of the advance (The ubiquitous perception that a Maruti is a perfect machine and can do no wrong because its after-sales service is so-called 'perfect'; or a VW is a perfect machine because it is 'German technology')

I am just glad that the excessive 'hyacinthisation' of the market has still not completely engulfed the interests of enthusiasts.
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Old 28th July 2016, 20:36   #50
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Default Re: Why car companies shouldn't move away from their core values

Interesting post GTO, it's always great to have a meta-discussion other than the usual stuff.

I maintain that there are no 'core-values' from a automaker's business perspective(there are exceptions), it just a Customer's perception which is also flawed at times. Moreover, core values is so 19th Century thing now when the likes of Mr. Ferrari, Mr.Lamborghini and Mr. Honda, Mr. Toyota, etc actually had a vision and passion towards their core values.

Today, there is a Darwinian twist in the auto market where the fittest will survive. With the current market based economy, if an automaker doesn't adapt to the needs he'll get killed, literally. Hence one has to keep the core values on the walls of service centres and dealerships, become dynamic. And that's how Tesla was formed and is a great success, because the market wasn't adapting to the 21st Century needs and was quite tied up in old tech. Also, it's the only company who has their core values and sales going hand in hand. Others are having a hard time catching up.

Now coming to the customer's perception thing, there are different categories of people. For instance, in India there are people who consider vehicle as a symbol of pride(Hence spend loads of moolah) and for others it's just an another mode of transport > 90%( Maruti and Hyundai guys), then there is an other type: US who are thinking about cars a lot more than an avg person does and are fixated on a perspective: Brands -> Core Values and expectations and over think about everything.

In the end, its a business and in those board meetings, the Directors are more into Money and have to adapt ASAP to the conditions, keeping the core values, as I said on the walls of Board Room.
With the onset of tech in Automobiles(Google, Uber, Tesla, Nvidia et all) we will see the core values getting trampled again and again.

Remember, car is just another mode of transport, nothing more(for the majority) which is to be executed as efficiently(cost) as possible.
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Old 28th July 2016, 22:25   #51
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Default Re: Why car companies shouldn't move away from their core values

Wow, what an amazing thread!
GTO's words is exactly what happened with me while buying cars.

Nano : Total trust in Ratan TATA's words , TATA brand as whole and ofcourse teambhp reviews

Baleno : VFM car ( actually pretending to be a premium car thanks to NEXA ), but one thing which was different from usual Maruti's is that it is not cramped for space at back.

And NEXA is actually for this reason, the VFM thing is deep in minds, so no one thinks of Maruti as premium, which they are trying to change by NEXA.
( Not joking, but Tiago's dash seemed to be of better quality than Baleno to me )
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Old 28th July 2016, 23:31   #52
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Default Re: Why car companies shouldn't move away from their core values

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Originally Posted by Aaron:) View Post

The Getz was a great car, but IMHO it wasn't the best example of Hyundai sticking to its core values. It's interiors were rather boring and plasticky
The interior design was not flashy, it has German traits. It has quality plastics that feels awesome 10 years down the line. The Getz prime had bad interiors.

Before the i20 and Verna, Hyundai never loaded their cars with features. I wouldn't say that Swift and Getz were direct competitors. The Getz was more spacious. The Getz was succeeded by the i20, Maruti had to make an all new car to compete with the Elite i20. It was just the case of the right product at the wrong time. Most owners swear by their Getz.

Quote:
Originally Posted by Sherlocked View Post

Hyundai I feel is one company which started off on a different path
Yes. The transformation the brand has undergone is tremendous.

Quote:
The Getz......The car wasn't stylish, didn't look good, wasn't striking to look at from any angle. Looked simple.
Personally, I feel that the Getz is the best looking old hatchback 10 years down the line. It was designed at the German design studio, hence the timeless design along with a few curves thrown in.
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Old 29th July 2016, 00:27   #53
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Default Re: Why car companies shouldn't move away from their core values

BMW's core value " Sheer Driving Pleasure ". Yet their new car's such as the X1 are surprisingly front wheel drive vehicles ( the affordable ones ) and others models are loosing the Hydraulic steering for Electronic ones and no manuals offered in India.

Abroad and soon to release Lexus in India. The IS and CT are trying hard to be like BMW by making their car's more sportier. Their core was always offering super reliable, highly refined and Luxurious car's. Their car's are still not sporty though. Models such as CT 200 has flopped very badly. For same reason I think they should not bring in their cheaper IS and CT models to India.

Rightly so ES and LX do make a lot of sense as it focuses purely on the refinement and luxury core competencies of the brand.
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Old 29th July 2016, 01:49   #54
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Default Re: Why car companies shouldn't move away from their core values

When talking about core values, lets keep in mind that in certain situations the said values turn into liabilities. If the core value of my brand is handling at the expense of GC and ride quality, I should rather not be in the Indian market where the road alternates between potholes and speed breakers. How often do the enthusiasts who work 9 to 5 in any of the metropolises get to drive enthusiastically? Would you take a blind corner at high speeds in your Ford or Fiat, given that ANYTHING may await you round the bend in this country?

Also, given the average speed and the stop and go nature of traffic in the Indian cities, what would you rather have- a safe tank that requires you to have an oil well, or a light car which will give you better kmpl?

As for Tata, the most innovative passenger car company in India (they introduced the diesel hatch as well as the "compact sedan" in the indian market), they lost their most loyal customer base- the cab driver- to Hyundai and Maruti. And despite doing rounds as taxis, none of the Maruti and Hyundai models have lost their appeal to private customers. What can we conclude from it?

Firstly, "taxi image" has nothing to do with the success or failure of a car model. The Wagon R still is more premium than the Alto despite being a darling of the Uber cabbies. Secondly, moving into the competitions turf is a good idea. However, one shouldn't leave ones USP while attacking the competition. Maruti and Hyundai has ensured that the reasons why their cars appeal to the target audience remains intact while venturing into the taxi market. Whereas Tata actively discouraged the adoption of the newer models (vista, bolt, zest, manza) by fleet operators. As a result, right now they are neither here nor there.
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Old 29th July 2016, 14:18   #55
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Default Re: Why car companies shouldn't move away from their core values

Nobody has really thrown much light over VW's core brand attributes. Let me take a shot:

Volkswagen: Quality, Engineering, and Technology. VW as brand has always aspired to make quality cars, underpinned by solid engineering. In whichever segments it makes cars that don't have to adhere to uber strict budget, it makes good cars - be it the Jetta, Golf, or Passat. Also, they've not hesitated to price their products just a wee bit higher than the competition, on premise that customers are ready to pay 'a bit more' for the additional quality (and in quality conscious market such as Europe - it works). VW has also tried to keep on taking the technology baton forward, by making it available to the masses - be it turbocharging, dual clutch gearboxes, or hill assist. After all, VW is a mass brand - regardless of what the company thinks of itself.

It is also a brand that struggles on some accounts - such as keeping the cost structures in check..even when VW has not produced cars in Germany, it has consistently struggled to adhere strict price targets, which has resulted in making some of their cars non-competitive. Another one of its Achilles heel is reliability (or the lack of it), which is the number one reasons VW has struggled in the US of A. Also, the general upkeep of VW cars is higher than the competition - while this is true across the globe, the difference is more striking in India. Compare the 14-18k I give for my Jetta's regular service compared to 5-7k for a similarly priced Toyota Corolla.

At a business level, I don't think they've done a great job at brand management, marketing or demographic understanding either - I say this because I know they spend a ton of money with the Strategy Consulting firms trying to get these aspects right. And VW has close to zero understanding of the Indian market


I'd like to disagree with the core brand attributes of Toyota though. I think the brand stands for reliability and durability, but not as a much in outright 'quality'. Yes, in terms of part failure rates, I am sure it is one of the best. But, not so in terms of material quality or car architecture platforms..when was the last time you sat in a Toyota and said WOW! for the interiors or swore by the sheer driving prowess of the car. Honda, I think, is more balanced (the erstwhile Civic was a great example of quality, excitement and reliability).

Last edited by Abhi_Automobile : 29th July 2016 at 14:21.
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Old 29th July 2016, 16:51   #56
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Default Re: Why car companies shouldn't move away from their core values

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Originally Posted by Abhi_Automobile View Post


I'd like to disagree with the core brand attributes of Toyota though. I think the brand stands for reliability and durability, but not as a much in outright 'quality'. Yes, in terms of part failure rates, I am sure it is one of the best. But, not so in terms of material quality or car architecture platforms..when was the last time you sat in a Toyota and said WOW! for the interiors or swore by the sheer driving prowess of the car. Honda, I think, is more balanced (the erstwhile Civic was a great example of quality, excitement and reliability).
My point was almost the same. If you happen to visit Japan anytime, then you must look at the god awful Toyota taxi's there which are clearly not quality in terms of interiors but reliable and durable.

I talked to quite a few Japanese folks about their cars in general and their ratings were Toyota (Reliable) -> Honda (Exciting) -> Mazda (Crazy/Exciting). Those were their top 3. They seemed to like Nissan too for the relatively lower cost and the work Ghosn has done in reviving Nissan when asked about Nissan. Suzuki wasn't rated much by the folks i talked to (almost like an after thought)and they seemed to consider it as an inferior brand in general.
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Old 29th July 2016, 20:19   #57
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Default Re: Why car companies shouldn't move away from their core values

Every company has its own unique value proposition to sell. Company is successful as long as the value proposition is relevant to some target segment and that segment is sizable volume.

Below are some of the attributes that companies claim, but claiming only one value (or even as significant portion causes identity crisis).
- Cost (ownership, fuel, maintenance)
- Safety (relative)
- Reliability
- Image in society
- Innovation (features, ..)
- Fun to drive
- Comfort
- Build quality

Many of these are very subjective. For someone it could mean lasting forever, whereas for someone else meeting some standard would suffice.

We have case of Taxi owners and highly affluent buy from same manufacturer (Toyota Etios and Tforts). Merc sells trucks and cars without identity crisis. These grey areas complicate things.

Manufacturer or even sub brand gives only an introduction. Beyond that the individual product's combination of attributes and acceptance of combo by masses is what makes the product last in the market beyond few months.

In today's context, manufacturers are trying to tick every check box (like daily news paper which caters an adult to teen to kid) with some element. With so many combinations, what to expect from whom is becoming very unpredictable. So, we see so many duds!
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Old 30th July 2016, 13:26   #58
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Default Re: Why car companies shouldn't move away from their core values

I’m probably digressing here but I’d like to present a counter argument as to how successful brands have not deviated from their core values.

Core values are more than just what is represented by a mission statement on the proverbial corporate wall; it is what the brand stands for, whether an automotive brand or otherwise. Just because an OEM has launched some products in a particular market that seem not to conform to their overall brand philosophy (a decision that might be driven by local preferences) such as India does not mean they are diluting their core values for attaining a critical mass in a particular market especially in a geography that is yet to mature completely is far more important to sustain long term economic viability.

The harsh reality is that a lot of brands have moved away from their core values under the ever present pressure to keep their stock prices up and maximise shareholders’ value. On account of this constant pressure to have a fantastic next quarterly result instead of having a long term strategic vision companies start to manoeuvre tactically for short term financial gains. As a result of this in no time they start churning out cookie cutter product that are supposed to give them blockbuster sales in the short term, never mind the fact that these products end up meaning nothing to their core target audiences. This happens primarily when bean counters start to have a major say in product planning strategy rather than marketers/designers & engineers.

However even in these uncertain economic times some automotive companies have stuck to their core values to a large extent & I will list 3 of these companies in order of their ability/inclination to do so (in my humble view)

1. Jeep (part of the FCA now) is one such brand.

Currently when FCA has a dearth of successful products in their European portfolio on account of their inability/inclination to make large capital investment in new platforms, Jeep brand is driving this behemoth especially in North America and increasingly around the world.

Even though Fiat product planners have been successful in their efforts to push European platform & disguise these as Jeep (Jeep Renegade is one such example which shares it’s platform with believe it or not Fiat 500). Largely however senior folks at Jeep have been successful in keeping their iconic products such as Wrangler & Grand Cherokee as far away from FCA’s designs as possible.

Year after year Wrangler has seen its global sales increase & even all the efforts to smoothen its rough edges whether it is handling, suspension or changes to its drive train in face of increasingly stringent emission norms have not diminished its off road capabilities one bit which is its core strength. I would even say that Wrangler’s successive iterations have become tougher & more off road worthy & 225,000 new owners in 2015 in North America alone is a good testament to that belief.

Let’s take the second most popular model in Jeep’s line up which incidentally will also be offered by FCA in India that is Grand Cherokee. It is one of the most off road capable SUVs that you can drive today. Last year Grand Cherokee outsold Land Rover LR4 (Discovery in some markets) 20:1 in North America. If there is one SUV that I will dare take in one and half feet of snow it is Grand Cherokee (have done that personally).

Even the rest of the Jeep portfolio is replete with platform them have some degree of off road credence. Almost all of them come with some kind of a 4WD system.

Powers that be at Jeep have been to withstand the pressure to conform to popular forms/design trends & reduce their vehicles to one more cute ute on the block and thank God for that.

2. BMW - The Ultimate Driving Machine

Yes I agree that some of their cars may not have the edgy driving experience anymore (particularly 3 series), yes they have introduced electronic power steering & I have lost count of the number of electronic nannies that their cars come saddled with. The fact of the matter is even today if I were to pick up a sports luxury saloon that hits the sweet spot between opulent but functional interior, great handling, powerful engine, a terrific manual or automatic gear box, exteriors that you cannot confuse with any other brand it will be a 340 ix.

M3 & M5 continue to set benchmarks when it comes to great handling cars that can tear up the asphalt & keep up with the fabled supercars. You may want to have a look at this video

Let me also make an honourable mention that there is Harvard Business School’s case study on BMW films (I did this case in my grad school when I was doing my MBA a decade ago).

All the major OEMs in the sports luxury saloon segment be it MB, Audi, Jaguar, Infinity, Cadillac or even Lexus benchmark their mid-size sports luxury saloons against the 3 series though I must mention that the new XE from Jaguar has been making quite bit of impression lately.

3. Porsche

Some people might think that they have committed a sacrilege by making the Cayenne & Panamera. Did the Porsche aficionados ever imagine that Porsche will make a SUV or a four door saloon, probably not. However the continuously evolving consumer preferences dictated that decision & the chart topping sales number of Cayenne have shown that it was not an incorrect decision.

Question is if while designing these vehicles did Porsche compromised on what a “Porsche” stands for, the answer is a resounding No. The brand has always stood for an ultimate handling sports car with a fiery engine & interiors that are totally driver oriented that is not outlandishly priced (okay most of these now a days are). Porsche Cayenne is probably one of the best handling; blindingly fast SUVs that you can buy today if not the best. You can live with most of these cars on an everyday basis. Once I was driving through Banff National Park & stopped for taking a break by a river side when a gentleman who probably was in his late sixties pulled up in his steel gray 911. The car looked immaculate & I asked him how old the car is, he said 14 years. He further said if I could, I would take it to my grave.

Ferdinand Porsche must be very satisfied man.


Brand philosophies evolve with time as these have to be kept contemporary; that however does not mean fiddling with their core values for if these values change the soul of the brand dies somewhat. If a brand stands for a set of attributes those have to reflected in all its product offerings to a large extent.

Automotive purchases are not a rational decision, when you look at a picture of an automobile it should talk to you about what it stands for. If it does not do that then it is a commodity & no longer a brand. This is as true for mass market brands as it is for luxury brands. When the core values of brands become muddled the brand strength erodes.

Just look around in today’s market place and you will see a graveyard of such brands; some are already there some are heading for it.

Sheer sales numbers are driven by a matrix that has many more variables than just the brand proposition for people will buy a commuter when the objective is just to go from A to B however the automotive field has always been more than just about a transportation experience. Buying a vehicle is a high involvement product purchase experience (for a few) that has more than a cerebral connect and that explains why we don’t we have the forums to discuss shampoos or detergents or chocolates or such other mundane products...enough said.

Last edited by Vikram Arya : 30th July 2016 at 13:50.
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Old 30th July 2016, 13:52   #59
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Default Re: Why car companies shouldn't move away from their core values

Lovely thread that has already inspired some insightful posts. Completely agree with the premise that the moment a company starts straying from its core values (in the good old days we called it "core competence") it gets into trouble. Which is why it's so troubling to see Honda straying from its refined, premium offerings or BMW pushing FWD cars with inferior gearboxes. Even Hyundai has lost one core value that I know of: great dealership experience across sales and service. From what I hear these days, my fuss-free and delightful Accent ownership (2001-07) seems like a distant dream now.

It'll be interesting to see if any company will actually manage to regain market share by returning to their roots. GM and VW desperately need that in India at least, as does Fiat and to some extent Ford.
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Old 1st August 2016, 18:35   #60
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Default Re: Why car companies shouldn't move away from their core values

Quote:
Originally Posted by GTO View Post
Related Thread (Perception, Price and Looks : The factors that sell a car)

Maruti = Value for money. Take a look at all their best sellers today and each of them is priced well (including the Vitara Brezza which forced a price cut on the EcoSport). But when the car maker tries to move away from the VFM positioning - no matter what the segment - it bombs.

Overpriced Baleno sedan in 1999? Flop. Overpriced Kizashi? Flop. Rs. 3 lakh premium for a 1.6 engine (in the S-Cross)? Flop. No thanks, 85% of customers will happily buy the S-Cross 1.3L. It's not that Maruti's million+ rupee cars failed because of the brand. They failed because they didn't offer what the brand stood for (value). The cars were simply overpriced
[/b]
GTO- Being the owner of 2012 model Kizashi I will beg to differ that car was/ is not value for money.

I am sure I will be the only one here having a difference of opinion as I am one of 190 (owners) and I love my ride.

I will better put it that way- Car was too premium to bestow a manufacturer like Maruti or simply was not fit to be presented in a budget portfolio. Few points-

- All bells and whistles like dual zone climate control, memory seats, 6 airbags, ESP . Though I was baffled with absence of touchscreen and reverse parking camera
- Power of 180/ 176 HP pure Naturally Aspirated 2.4 l Petrol. Dual exhaust sound is still something make me smile after 75k+ on meter. All 4 discs, 215 R17 rubber.
- Car is more planted and stable then A4 at crazy speeds. Driven back to back.
- Build to last, unlike Maruti it was Suzuki CBU. Feel more like Volkswagen then a Maruti in built.

To put into perspective car was easily offering a 40+ lac package at 22 lacs.

So as an owner if you want me to put it as analogy I will probably put it that way- You don't go to eat Lasagna at roadside vendor and neither go to Taj to have pav bhaji.

Pardon me if I am biased here but as an owner isn't one allowed to
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