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Old 20th July 2017, 10:46   #1
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Default Renault Kwid: Disruption in the entry-level segment

A good article on what disruption in automobile sector means in countries like India.

The author argues on why the $4000 Kwid is as disruptive as the $30,000 Tesla Model III.

Few excerpts :

Quote:
In India, where the average wage remains a fraction of those in the first world, it starts with an affordable car that isn’t a complete piece of junk.
Fortune at the bottom of pyramid as said by famous C K Prahlada
Quote:
“If you want to enter a market,” philosophizes Gerard Detourbet, father of the Kwid, “you must start at the bottom.”
It's called design to cost
Quote:
That any $4,000 car can create a positive feeling seems miraculous, and only becomes even theoretically possible because of Detourbet’s merciless “design-to-cost” strategy
Article link

Last edited by GTO : 21st July 2017 at 10:26. Reason: Correcting url :). Thanks for sharing!
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Old 21st July 2017, 10:46   #2
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Default re: Renault Kwid: Disruption in the entry-level segment

Some exaggerations & factual errors in the article, yet I'll agree that the Renault Kwid has disrupted the entry-level segment in a big way. It's even forced Maruti into making an SUV'ish styled entry car!

- The Kwid proved that a cheap car can be a good looking car too (Eon also did that, but its design was polarising).

- The Kwid showed how a cheap car can be well-equipped.

- Earlier, it was assumed that 3-lakh customers are incredibly conservative and will only trust Maruti, Hyundai & Tata. The Kwid's sales success dispelled that notion. If the product is irresistible, the customer will come. We saw this with the Duster too when it was the only monocoque SUV in town (Renault was unknown to the masses at that point in time).
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Old 21st July 2017, 11:49   #3
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Default Re: Renault Kwid: Disruption in the entry-level segment

I would like to look at it as Maruti dominating the market with no better alternatives. Now if Maruti can give the same value to customers, it will negate the Kwid effect. Given cars which are alike, Maruti would win easily based on its other strengths.
Depends on how Renault will now carry one with the success and create a mindshare with customers. It can also use it to now make inroads slowly up the ladder. With Duster they did the same and stagnated.
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Old 22nd July 2017, 01:39   #4
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Default Re: Renault Kwid: Disruption in the entry-level segment

This gets me thinking.

15 years ago, what were the options for the entry level buyer? We had the M 800, Alto and Chevy Spark

We all fondly remember the Spark for its ride quality, refinement and overall premium feel. Alto was a thorough workhorse that did duty everywhere from the deserts of Rajasthan to the mountains of Kashmir to the jungles of the north-east. 800 was an absolute legend in itself. All three would drive nice and properly and did everything you could possibly ask without any fuss. Add another 50k to your budget and you could get the jellybean Zen, original WagonR and Santro, as well as the Indica V2

Compared to these three, how different are the current entry level cars? Are the Alto 800, Eon and Kwid actually significantly better? If I am to make a general comparison,

Build quality: Current cars are worse. Sheet metal is thinner, plastics are worse(Eon is an exception), everything is lighter and more cost cut.

Ride quality: Current cars are similar, if not worse. Suspensions they use nowadays cars loose their damping very quickly. Older cars also had the benefit of running lower tire pressures.

Refinement: Certainly not better, might be worse. Absolutely no 4 cylinder options to choose from. Sound insulation doesn't seem to have improved. You still feel as much of the road, if not more. Chevy Spark was particularly good here, while the Kwid is just terrible.

Performance and drivability: No comparison. Older engines were much more drivable with better spread of torque.

FE: Minor improvements. Most likely because of ever increasing tire pressures.

Safety: No change. Old cars were not safe. Current cars are proven death traps as well.

Features: Only worthwhile addition is the Kwid's 7'' touchscreen. Front power windows and basic music systems are staple nowadays (Spark and Alto 1.1 VXi had power windows). Power steering was available back then as well.

Emissions: BS2 is now BS4. Government mandated.

Cabin space: Kwid is certainly more spacious, otherwise they are still pretty much the same. Honorable mention to the now discontinued Tata Nano. It was a masterclass in interior packaging.

Longevity: Older cars were thorough workhorses who could withstand a lot of abuse. You can still find well maintained models in perfect conditions even today. We had a WagonR back in the day, one of the initial ones sold in the country. Used it for close to 3L km, half of them on CNG. It was my college car. 9 of us used to squeeze inside and travel. Current cars are simply not that durable. Quality of parts used back then was better.

Automatic option: They don't really remain entry level (on road prices go 5L+), And then, AMTs suck. Budget AMTs suck real bad. Especially the Kwid's. No creep function, no manual override? What were they thinking? Still we now have affordable and acceptably efficient automatic options to choose from. WagonR and Santro did have a TC auto option initially, but they never caught on.

Point is, the entry level segment has really not developed much over the past 15 years. While the Kwid has certainly moved the game forward in some areas, things are still pretty much where they were back then.

Let's leave the Kwid's jacked up looks aside for a moment. Most changes have been forced upon by tightening emission norms rather that actual R&D or competition, with Maruti maintaining absolute dominance. The only disruptive innovation anyone did in this segment was Tata with the Nano. An absolute marvel of engineering that just bombed (reasons for that are another debate). Now, people are trying with AMTs. Still, there is lot of potential for a truly disruptive product.

Last edited by Shreyans_Jain : 22nd July 2017 at 01:46.
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Old 22nd July 2017, 02:17   #5
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Default Re: Renault Kwid: Disruption in the entry-level segment

shreyans, you missed out on the interior visibility - older hatches were a breeze to park and reverse because of the low sill lines. now due to side impact standards, and weight reduction, every car comes with crazy high window sills which reduce visibility, make you feel claustrophobic, and pushes newbie drivers to fit reverse sensors on cars which would otherwise not have needed them!
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Old 22nd July 2017, 08:28   #6
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Default Re: Renault Kwid: Disruption in the entry-level segment

Quote:
Originally Posted by Shreyans_Jain View Post
..fondly remember the Spark for its ride quality, refinement and overall premium feel. Alto was a thorough workhorse ....

Build quality: Current cars are worse. Sheet metal is thinner, plastics are worse(Eon is an exception), everything is lighter and more cost cut.

.. nowadays cars loose their damping very quickly...

Refinement: Certainly not better..

Performance and drivability: No comparison. Older engines were much more drivable with better spread of torque...

Longevity: Older cars were thorough workhorses who could withstand a lot of abuse... Current cars are simply not that durable. Quality of parts used back then was better.

Point is, the entry level segment has really not developed much over the past 15 years..
Good observations.
There is a good reason why it is so and that is the cost factor.
15 years back, these entry level cars were available around the 2 to 3 lakh price bracket. In current days value its about Rs 8 to 10 lakhs (accounting for inflation). At that cost, it was easily possible to get that component quality. We still get better quality cars at 8-10 lakhs bracket now don't we

Are the entry level cars selling at 8 to 10 lakh bracket now? They are not. Surprisingly the entry level price is still maintained at around 2 to 3/4 lakh bracket in today's diluted currency value. How do they achieve it? by increased scale of production, technological advances/automation in manufacturing and imporantly by cutting on component/parts quality (read cost). The results are bound to be obvious: low quality cars as rightly observed by you.

Last edited by for_cars1 : 22nd July 2017 at 08:35.
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Old 22nd July 2017, 16:26   #7
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Default Re: Renault Kwid: Disruption in the entry-level segment

Quote:
Originally Posted by greenhorn View Post
shreyans, you missed out on the interior visibility - older hatches were a breeze to park and reverse because of the low sill lines. now due to side impact standards, and weight reduction, every car comes with crazy high window sills which reduce visibility, make you feel claustrophobic, and pushes newbie drivers to fit reverse sensors on cars which would otherwise not have needed them!
Oh yes! Visibility. I remember reading a stat that about 42% area of the M800 was just glass!

Lesser glass area due to side impact safety norms is just marketing BS, we all know how (un)safe all of these entry level cars are. It's all about cost and weight. Metal is both cheaper and lighter than glass

Quote:
Originally Posted by for_cars1 View Post
Good observations.
There is a good reason why it is so and that is the cost factor.

Are the entry level cars selling at 8 to 10 lakh bracket now? They are not. Surprisingly the entry level price is still maintained at around 2 to 3/4 lakh bracket in today's diluted currency value. How do they achieve it? by increased scale of production, technological advances/automation in manufacturing and imporantly by cutting on component/parts quality (read cost). The results are bound to be obvious: low quality cars as rightly observed by you.
The increase in volumes of the entry segment over the past 15years has been tremendous. Plus, the kind of part sharing they do nowadays, this was not happening back then. Economies of scale are phenomenal. And then, the (Maruti) products as such are not far removed from what they were back then. R&D cost to sale ratio is absolutely nothing.

Also, it's not that their margins have reduced to.accomodate inflation. Maruti still mints money on every Alto sold. If you are or know anyone who is a vendor to Maruti, you will know just how aggressively they have cut costs, going well into the extent of compromising quality.

Last edited by Shreyans_Jain : 22nd July 2017 at 16:27.
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Old 23rd July 2017, 07:52   #8
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Default Re: Renault Kwid: Disruption in the entry-level segment

We still have my dad's first car, a 1991 Maruti 800, which is used occassionally by his brother (my uncle). A 26 year old car, with better sheet metal than most of the tin cans that Maruti produces today, my major grouse. I can hazard a guess most of their hatchbacks are similar in build, except the S-Cross.
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