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Old 19th November 2005, 11:52   #1
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Thumbs up A Tale of Two Manufacturers

By co-incidence, Economic Times featured two articles on two motown neighbours in Chennai. Two neighbours who set up house at the same time, of which one has just repaid its entire external borrowings and the other has accumulated losses, has just asked its parent for some more money....


http://economictimes.indiatimes.com/...ow/1300715.cms

http://economictimes.indiatimes.com/...ow/1300696.cms

VERY thought provoking...
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Old 19th November 2005, 13:17   #2
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good find steeroid.
shows what good marketing and good a.s.s does to the image of a company.
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Old 19th November 2005, 14:27   #3
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....and also getting product to market quickly and right first time with proper back up. A 10% delay can cost you 30% of your expected product revenue due to competiton.
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Old 19th November 2005, 18:03   #4
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I think more than anything, it was having a product most relevant to the Indian scenario. How relevant was the 8 lac rupee Escort with the silly 1.3 (?) petrol engine. They did come out with a 1.6 but that was only ages later. The Ikon was spot on, but with the volumes that segment had in 1999...could they make good money out of it?

Hyundai launches a hatch. An ugly looking hatch. But its practical, has a good service backup, refined, good build quality and pretty fuel-efficient. At a time when the only other hatches were Marutis, which people were terribly tired of. And in a segment that was just waiting to explode.

Ditto for the Tata Indica. Relevant product in a volumes segment. Its hardly got a high quality image and has absolutely pathetic service. But Tatas have gotten used to selling 10,000 Indicas a month.

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Old 19th November 2005, 18:18   #5
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Ford had their timing way off. I couldn't believe that Hyundai already paid their loans off, while FoMoCo USA is still pumping in more capital to make their balance sheet look good.

As much as we go on about Hyundai cars' handling and the brakes and the performance, but they make darn good business sense in our country. And as long as they make darn good business sense, I don't anticipate them to change too much. Ditto for Tata too.
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Old 19th November 2005, 19:45   #6
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FoMoCo and GM are now reduced to being health care providers ...who make a few cars to try and make ends meet
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Old 19th November 2005, 21:26   #7
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Its the same story in America too, with the largest selling car being a korean
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Old 19th November 2005, 22:05   #8
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Well then, according to this article, to be successful in India if your name does not start with Ho/To, you have to have one thing - Small Car.
A four door Ka would have done wonders for Ford.

Last edited by sajo : 19th November 2005 at 22:11.
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Old 20th November 2005, 07:33   #9
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GTO was spot on.
Hundai Santro was what India needed. A reliable City Affordable car.
With first rate ASS, it was a huge success. The Accent was for the higher end Middle Class Buyers. Once again a utility no frills very reliabel Sedan. Hundai got into the CRDI earnestly by being one of the first to introduce it. Accent CRDI is a run away Success model.

What the market needs at an affordable price with great quality and client/customer service.
It is Customer all the way, Silly is what Late Drucker would have said..



Time waits for Who?. None.
We need to Sync with Time.

Well, Ford did not get their Basics right at all.

Last edited by v_s_natarajan : 20th November 2005 at 07:36.
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Old 20th November 2005, 09:27   #10
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If we all go back 10 years in time we will realise that it's no surprise that American and European companies have failed in India. In 1995, the economy was just opening up, people didn't have the kind of money they have now and FE was the most improtant feature any car could have. ( it still is!). Ford knew that people in India know about the company. No-one knew that there is some company called Hyundai that makes cars but almost everyone had heard of Ford. I guess they tried to take advantage of the brand they had but took their prospective customers for granted. Ford and GM through opel are all econo basic car makers in their countries but tried to become premium car makers here because they thought their brand recall in Indian minds could help them do that. Little did they know that only 3 companies in the world can launch any junk in India and get away with it- Mercedes, Honda and Toyota.
Ford tried to rip us off with their Rs. 7lakhs (in 1995 mind you!) Escort with 58hp engine! Hyundai had a field day bringing out comparo ads of their 55hp Santro with the bare basic 58hp Escort, if i remember correctly. Ford rushed in with their car. No service set up in non-metro cities, poor customer service because they probably thought that Indians will take any nonsense from them and their dealers because Ford is giving us a chance to own a car with the Ford brand!.
Opel came in with the Astra. Good looks indeed, it still looks good even today but the car was heavy and it had that ponderous 77hp engine. These guys didn't even bother to give us body coloured bumpers with a Rs. 9 lakh car ( in 1995 mind you!). All they harped on was the German engineering. Expensive to buy, ponderous to drive, expensive to maintain, poor service support, zero customer service and why should they give customer service? They were giving german engineering after all.
Fiat : Lot has been said about them and probably thats one company that has gone through the maximum post mortem. To their credit, they didn't try to position themselves as a premium car brand and when they came in with the outdated Uno, they actually got over 3 lakh bookings. I can't believe they botched up the story from there. How could any company that had so much of association and recognition in their prospective customers minds botch up after getting such a overwhelming response!

But while we praise Hyundai for giving Indians the car they wanted at the price they wanted, lets also remember that no-one knew who or what Hyundai is. And lets not crucify ford and Opel for trying to ask for premium prices for their products. Remember, if Hyundai was well-known in India, they would tried to do the same thing that Ford or Opel did. Hyundai got lucky. They happened to be at the right time in the right place.

Last edited by amit : 20th November 2005 at 09:30.
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Old 20th November 2005, 11:57   #11
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I agree with you Amit, there is a not-insignificant element of luck in Hyundai's success.
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Old 20th November 2005, 14:11   #12
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Quote:
Originally Posted by islero
I agree with you Amit, there is a not-insignificant element of luck in Hyundai's success.
And not the fact that they're the only Indian manufacturer to have a presence in EVERY segment of the market? Especially when the comparison is to a manufacturer who has only ONE brand that does reasonably well and is not even a market leader in that segment?

Not the fact that they have one of the best service networks in the country, giving you the best and probably the most economical ownership experience?

Not the fact that they have continually improved their cars even when they were sitting on top of the numbers pile?

Not the fact that they trailblazed the introduction of new technology like Common Rail diesels?

Not the fact that the quality of their products is being talked of in the same breath as the Japanese big 2?

Not the fact that they are now India's No.1 exporter of automobiles, turning this country into a manufacturing hub, thereby doing something that our 'Indian' companies and the other company nurtured by the government of India havent been able to?

Not the fact that even their models that arent doing well in the market STILL offer the best value to customers in terms of options, features and everything else except perhaps IMAGE.


Nah! It HAS to be luck - because its Hyundai...I mean how can a Korean company succeed when we love european vehicles? Close this thread - the idea was not to have a subjective discussion on brands we likes or dislike, but to present cold facts for objective judgement based on the actual performance of two manufacturers who started the race from the same point but are currently so far apart that they can no longer be compared.

If you look at the world through yellow-tinted glasses, your vision can only be jaundiced.

Last edited by Steeroid : 20th November 2005 at 14:18.
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Old 20th November 2005, 15:13   #13
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Have to agree with some of the observations made by Amit,GTO and Steeroid.

Though there is an element of luck associated with the succes of Hyundai( Any company for that matter needs it in the initial stage), We at the same time should appreciate and acknowledge the fact that Hyundai took us seriously and gave us the best they could offer and gave us the attention and time. The results are there for everybody to see.

It only goes to show that if you are not serious and practical enuff with your offerings in India, you will be shown your rightful place down the ladder in the long run no matter how backward you percieve the Indian market to be. The Europeans and the Americans have to get their acts together if they want to see solid revenues from this part of the world. There are no short cuts to success here and the Japs and the Koreans know this very well because its not their style.

Last edited by muni : 20th November 2005 at 15:15.
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Old 20th November 2005, 22:27   #14
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Well said Steeroid. Theres a saying that "luck" always favors the ones who work the hardest and think the smartest.

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Old 20th November 2005, 23:49   #15
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Quote:
Originally Posted by muni
It only goes to show that if you are not serious and practical enuff with your offerings in India, you will be shown your rightful place down the ladder in the long run no matter how backward you percieve the Indian market to be.
Very well said... (2004 onwards) What you say is very true, but at the same time I think Hyundai Motor India has made a big mistake stripping down their Indian version of the Sonata Embera so much (especially when that particular competes with a car like the Honda Accord).
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