Go Back   Team-BHP > BHP India > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 4th February 2011, 16:25   #46
Senior - BHPian
 
ac 427's Avatar
 
Join Date: Oct 2005
Location: Mumbai
Posts: 1,331
Thanked: 113 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by GTO View Post
Seriously, what on earth is happening here?
everyone wants to have a pie of the 'great indian middle class'. every one wants to make more money, every one wants to increase their brand foot print. that is what is happening .

cheers,
ac
ac 427 is offline   Reply With Quote
Old 4th February 2011, 16:36   #47
BHPian
 
Join Date: Nov 2009
Location: World
Posts: 773
Thanked: 320 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

This proves that anything can happen in India ! Seriously , the Indian Automobile space is going through some exciting phase ! The sales are increasing , and will increasing , catching the eyes of Big players. And the companies know , that Indians are Value conscious ! And also long as a good brand will cater great value , the Brand will have a have a long long run !
It's a proven fact , in India customer goes for an automobile which gives :
Piece of mind
or
Great value
fz_rider is offline   Reply With Quote
Old 4th February 2011, 17:07   #48
BHPian
 
Join Date: May 2009
Location: Bombay
Posts: 357
Thanked: 101 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by adimicra View Post
I thought as per ARAI, the K10 is one of the most efficient engines in the country.
So did I, but at least not the A Star.

Quote:
Originally Posted by adimicra View Post
And 4 cylinders like Swift/Ritz/Jazz do provide equal or better mileage than Polo's 3 cylinder (petrol). I am taking ACI and TBHP ownership threads as the references here. So, I don't believe it is because of FE only that VW has provided 3 cylinders. I firmly believe it is due to the cost savings.
From a production standpoint, I mostly agree it is cost saving apart from the FE.

Quote:
Originally Posted by adimicra View Post
Anyways, coming back to your points. I agree mostly. Some brands have developed their brand image over the years by providing technological superiority, reliability etc. and they definitely deserve a premium. But how much is the question?
Agreed, it is just a notional value and it could be different for everyone.

Quote:
Originally Posted by adimicra View Post
The so-called VFM brands are venturing into luxury segments. They are providing best-in-class features and specs and I don't feel cars like Kizashi or Aria don't exude the quality as per the segment they are competing in. And IMO, they are reasonably priced and considerably cheaper than the so-called 'premium' brands. So what are cribbing about?
Just because it is a Maruti Suzuki, is it fair to expect it to be priced along with Civic whereas it competes with Accord/Camry in international markets?
I will reserve my comments for the Kizashi after I see it and drive it. However if we have a locally developed product, pricing has a lot of scope for improvement especially for the Aria. Mind you I really like this vehicle. Tremendous road presence!
NevGin is offline   Reply With Quote
Old 4th February 2011, 19:24   #49
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 47,713
Thanked: 88,942 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by NevGin View Post
The so called archaic 3 cylinder was specially developed for better fuel efficiency. The 3 cylinder TDI finds its way in the Blue Motion which is one of the lowest emission vehicles in Europe.
True. But AdiMicra does have a point : The only way VW & Nissan could price their hatchbacks competitively is by saving costs & 3 cylinder engines. There isn't a doubt that the 4 cylinder K Series or the i20 1.2 engines are superior to both, the Polo's or Micra's engines. And the 1.3 MJD ain't bad on FE either.

Quote:
Originally Posted by ajay0612 View Post
On what count is it found wanting as compared to similarly priced (or slightly higher) competing products ?
Please read through my very-detailed Aria review to know all about the Aria, and where Tata could have improved.

Quote:
Of course we won't like them to launch a product for making losses (by artifically pricing the product lower than cost - unethical)
Neither do we want them to overprice their cars by 2 lakhs. This is Tata after all, the brand that's synonymous with providing great value.

Quote:
Those 'few people' have given Tata the encouragement to continue improving and delivering more.
So have I, and I've put my money where my mouth is (via a Tata product). If you want to hear praises only, I'm not the person to speak to. If you want an honest appraisal, come to me. Team-BHP gives manufacturers all the bouquets and brickbats they need, in good measure. I reiterate that the Aria is a giant leap forward for Tata's product development, but their marketing department got the price wrong.

Quote:
And that is what the competition wants - less competition from indegenous suppliers.
Fact is, even in its initial 4 months when the hype is highest, the Aria hasn't created a dent on the competition. Check the Jan sales figures for more information.

Quote:
When one is paying through the nose, he tends to take good care.
On the other hand cheaper Indicas & Indigos are abused a lot and lot of them run as taxis. (I am not denying that few cars might indeed have had issues from day one, like yours, but such niggling issues are being noticed in few cars of every manufacturer.)
Laughable statement at best. My C220 is the most pampered car of the garage, yet the poorest in terms of reliability. The 3.xx year old Indigo received the exact same treatment as my 7 year old OHC (and one with 4X the mileage)...in fact the OHC even had much higher running. Still, the Indigo always gave the Benz company in visiting garages.

And by your statement of "when one is paying more", the more expensive the car, the more reliable it should be? I suggest you look at the absolutely fantastic reliability record of cars that are cheaper than the Indica / Indigo / Safari (starting with the Maruti 800 and Alto).

Quote:
Producing better workmenship does not cost so much to demand 3-4 lakh premium over similar indegenous product.
Of course, you will disagree. However, the most valuable opinion is that of the customer. And clearly, a majority of the market agrees with me; the Innova is well worth the premium and outsells the Xylo 2:1 most months.

And no, it's not all about the brand either. Remember, the most calculative customer is the taxi owner. Fact is, most taxi Innovas sell than Xylo cabs. That in itself is an attestation to the product. Next time you meet a fleet owner, ask him about the Innova.

I rented an Innova cab over a Kerala holiday; a white coloured basic model with about 1.5 lakh kms on it. In all my experiences with cars, I have yet to see a Tata or Mahindra - with such high mileage - that drove as well. Cover the odometer and you'd think the vehicle had 40,000 clicks on it!

Quote:
Originally Posted by Jayabusa View Post
VFM brands are making their presence felt in premium/niche segments with the intention of laying a foundation for penetration in future
See, that's exactly my point. To effectively penetrate the luxo-segment, they'd need to price their cars really well.

Last edited by GTO : 4th February 2011 at 19:27.
GTO is offline   Reply With Quote
Old 4th February 2011, 20:12   #50
Senior - BHPian
 
ghodlur's Avatar
 
Join Date: Sep 2009
Location: Thane
Posts: 5,038
Thanked: 2,075 Times
Smile Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

GTO,

Isn't a fact that the so called VFM manufacturers till date were addressing the mass segment whereas the Premium brands were basically targetting the premium segment alone. The Tatas and the Maruti's introdued the common man to the so called exclusivity i.e the car whereas the premium brands mostly ignorant of this section were catering to the so called high class or the affordables.

It was but obvious that the premium brands realized late that the market is not way at the top but at the bottom hence the rush to introduce VFM models to grab that slice of market and in the process to establish their market presence. Meanwhile the market leaders would obviously venture into the premium segment with the aim of expanding their product range and in process try to cater to all segments of buyers. For them it was a gamble in the unexplored territory but they were not so successful since there were already the established premium brands with their range of products.

So it can be seen here is that the Tatas and the Marutis were basically losers in their attempt to jump over to the segments where they didn't stand a chance whereas the premium brands were laughing all the way to the bank with their VFM products. Indian market is still a cost driven market where the cost of the vehicle makes or breaks it.
ghodlur is offline   Reply With Quote
Old 4th February 2011, 20:25   #51
BHPian
 
Join Date: Jul 2010
Location: Haridwar
Posts: 306
Thanked: 171 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by GTO View Post
Please read through my very-detailed Aria review to know all about the Aria, and where Tata could have improved.
Of course I have read that! All of them. In fact, that is the first thing I check - any new review by GTO. Those have magnetic charm. For once everyone will agree with me.

Quote:
Neither do we want them to overprice their cars by 2 lakhs. This is Tata after all, the brand that's synonymous with providing great value.
Quote:
I reiterate that the Aria is a giant leap forward for Tata's product development, but their marketing department got the price wrong.
Well. I agree to disagree. I still feel, it is fairly priced, going by the features & equipment level (it is a 4x4 too). For once, with this vehicle, Tata Motors wanted to break free of Taxi image. So they preferred positioning it higher than Innova while still providing value by loading it to the gills.

Quote:
Fact is, even in its initial 4 months when the hype is highest, the Aria hasn't created a dent on the competition. Check the Jan sales figures for more information.
Sometimes the inertia (image baggage) makes the start slow, but once speed picks up , there is no stopping. Let us not start writing obituaries so soon. Probably in a years time 4x2 version will come bang in the territory of Innova and set the sales charts on fire owing to new found image (of being a lifestyle vehicle).
ajay0612 is offline   Reply With Quote
Old 4th February 2011, 20:53   #52
Senior - BHPian
 
kiku007's Avatar
 
Join Date: Apr 2005
Location: Brisbane
Posts: 1,610
Thanked: 1,223 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Tata and maruti should be dreaming if they thought customers would walk in and pay 15+ lakhs to them and take ONLY one car with them. I mean, their customers come with the idea of getting 2 or 3 cars from them for tht money. Lol.
kiku007 is offline   Reply With Quote
Old 5th February 2011, 09:59   #53
mxx
BHPian
 
Join Date: Jan 2005
Location: Bangalore
Posts: 682
Thanked: 101 Times
Infractions: 0/1 (5)
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by GTO View Post
True. But AdiMicra does have a point : The only way VW & Nissan could price their hatchbacks competitively is by saving costs & 3 cylinder engines. There isn't a doubt that the 4 cylinder K Series or the i20 1.2 engines are superior to both, the Polo's or Micra's engines. And the 1.3 MJD ain't bad on FE either.
Not quite true on this one. I think in case of polo it is not just manufacturing costs, although it is one of the factor.
See, polo1.6 costs less than 40k above the 3cyl 1.2. Yes, this is a substantial difference in hatchback context. But, you have to consider that 1.6 is sold with more margins than the 1.2. now, if this is the only engine in petrol polo, it would sell more units and can be priced much lower. So, with this the total price difference will be lower. Take the case of only 1.6 in polo it will still be cheaper than the diesel, and i think in the premium end of hatchback segment, there will be enough customers for 1.6 polo which is like 25-30k above the current pricing for the 1.2

there could be other reasons
1) FE
2) differentiation with vento
3) customer perception of 4cyl petrol vs 3cyl diesel
mxx is offline   Reply With Quote
Old 5th February 2011, 10:22   #54
BHPian
 
Join Date: May 2009
Location: Jam-luru
Posts: 259
Thanked: 57 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

My take - Grass is always greener on the other side. But it's never easy to keep two totally different cultures in a single organisation. The senior leadership needs to understand this critical aspect as they go for 'greener' pastures outside of their comfort zone.
LonelyPlanet is offline   Reply With Quote
Old 5th February 2011, 11:16   #55
BHPian
 
Join Date: Jul 2010
Location: Haridwar
Posts: 306
Thanked: 171 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by mxx View Post
But, you have to consider that 1.6 is sold with more margins than the 1.2.
Quote:
i.e.
there could be other reasons
1) FE
2) differentiation with vento
3) customer perception of 4cyl petrol vs 3cyl diesel
The excise duty difference itself is 12% between the two cars! That itself comes about Rs 65K for Highline 1.2 & 1.6, while actual price difference is merely 40K! So definitely it is 1.2, which is giving them more margin .

Last edited by ajay0612 : 5th February 2011 at 11:17. Reason: correction
ajay0612 is offline   Reply With Quote
Old 5th February 2011, 12:04   #56
BHPian
 
ajman28's Avatar
 
Join Date: May 2010
Location: Chennai
Posts: 277
Thanked: 22 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

The world (primarily the developed nations) are just recovering from a major recession. The automobile sales have always been highest in these developed nations when compared to the ROW and for the past 2 years or so have been hit severly because of the recession. So we see more foreign brands come into India to tap our HUGE market (afterall these MNC's need to recover their lost sales elsewhere and technically we never had recession). Once they land up here, they realise that we are a very bottom heavy (in the pyramid) economy and to tap into this segment you need VFM (or similarly tagged) products. So that is exactly what these biggie's like BMW, VW etc are doing here. They need their sales numbers and for that they come out with VFM products. And ofcourse people buying their premium products still continue buying them so overall the companies are still happy.

Now for the traditional VFM companies: One fine day they wake and find all these biggie's entering India with VFM products, so to counter them why not launch a few "premium" products and enter into a new territory. It's something like "If you can do it, so can I".



Quote:
Originally Posted by adimicra View Post
This thread is not in the right spirit.
Let us talk about the respective cars and what they offer and not harp on this "brand image".

  • If Tata launches an Aria with best-in-class features, it still has to be priced at par with Innova, which can't hold a candle to the Aria?
  • If Maruti launches Kizashi with great specs and features, we expect the price of a Civic though it is more in the league of an Accord! Not fair!
  • If Volkswagen launches a Polo with an archaic 3-pot motor and worst-in-class features and then prices it higher than the I20 or Punto (after discounts), still it is considered VFM! Again, not fair!
High time to get rid of these prejudices. TBHP should lead the way
This is a very interesting point of view.

And yes, like someone mentioned in this thread, it is easier for premium brands to launch VFM products and get away with it than for a VFM brand to enter into a premium category.

Something like an "item girl" in our movies find it difficult to get a character role while an actor already carrying a character tag easily fits into an "item number"
ajman28 is offline   Reply With Quote
Old 5th February 2011, 14:11   #57
Senior - BHPian
 
Join Date: Aug 2010
Location: Delhi
Posts: 2,128
Thanked: 996 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

It is difficult for VFM manufacturers to introduce high end models, as the buying public, at least in India perceives premium car manufacturers as better. So when they introduce lower end models, they are perceived as low cost alternatives with all the quality and build of their higher cost brethren.

In contrast when VFM manufacturer launches a higher end model, doubts persist in the public mind regarding quality, reliability and what not. In my case when I had gone for the Esteem MPFI in 2000, I had a choice of taking that or the Baleno. Baleno at nearly 7L was more than 1.5L more, and though the car was brilliant all round, I opted out as I did not see it as a VFM. The Baleno was a slow seller and only took off when MUL reduced the price drastically. The same case is with Grand Vitara, which though an excellent offering is just not selling. I am afraid that even the Kizashi will go the Baleno way, and take off only when there is a major price correction.

Regarding quality of Indian cars, I think that is a corporate mindset. If MUL with sales of 1L per month can produce niggle free cars, there is no reason for Tata or M&M, with less than one tenth the volume, not to, after all it is the same Indian work force and the same service personnel. Once our indigenous manufacturers, over come the QA monster, we can also have same niggle free offerings we are used from International manufacturers. Lest you think that it is a design "thing", we are using similar CAD/CAM environment and in fact do a lot of CAD for others. It all boils down to Corporate motivation and implementation.
Aroy is offline   Reply With Quote
Old 9th February 2011, 21:18   #58
BHPian
 
Vibhanshu's Avatar
 
Join Date: Dec 2009
Location: Mumbai
Posts: 182
Thanked: 14 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by GTO View Post
Seriously, what on earth is happening here?

How is it that the same brands that get it perfectly well in a cost-competitive scenario, lose it all in the premium segment? Over-optimistic? Launching only for presence (and caring a damn about sales)? Volumes so poor, compared to their mainstream products, that they simply cant be bothered?
I think the desi brands (Maruti, Hyundai etc) have pricey cars just for the fact that they want to be in each segment. They basically underestimated that if they start localization with acceptable quality, its gonna be as 3/4 cost(Vitara anyone?).

If companies like Ford (making a comeback) and Volkswagen (almost new entry) can do it, then its a sheer shame on Maruti. I dont want to be rude, Maruti is a great brand with good products. But gone are those days. If it was not the case then this thread wouldnt even have existed . I think it boils down to 1 thing. Common Sense!
Vibhanshu is offline   Reply With Quote
Old 10th February 2011, 18:35   #59
BHPian
 
Tats07's Avatar
 
Join Date: Sep 2010
Location: Bangalore
Posts: 357
Thanked: 85 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Honestly speaking, there's nothing premium about the looks of Kizashi, neither do the interiors boast of a 19-20 lakh on-road price tag! I doubt how much sales they can achieve. Had they positioned it in the Toyota/Civic segment (and both cars look much better than Kizashi), with few less features here and there, they may have achieved better sales.

Anyway, we have to wait and watch if Maruti can prove us wrong.
Tats07 is offline   Reply With Quote
Old 11th February 2011, 18:36   #60
BHPian
 
Skyline GT-R's Avatar
 
Join Date: Mar 2010
Location: Dubai
Posts: 594
Thanked: 202 Times
Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

I don't know if it is alright to pair Toyota & Honda in same category.

While working for Honda, the trainers invariably mentioned at all new car launch sessions that "If Toyota & Nissan are @ 0, Audi @ 2, BMW & Mercedes @3 then Honda is @1" (In an imaginary graph)

They used to term Honda as an affordable luxury brand ahead of Toyota Nissan.

But in Indian market i guess it does not work out that way.
Skyline GT-R is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Big Money + Big Talent = The overpriced market dud. How? GTO The Indian Car Scene 171 25th June 2013 17:24
Are VFM car makers actually making more money on the cars than overpriced imports? tsk1979 The Indian Car Scene 58 14th November 2010 22:59
Are VFM cars really VFM? - Cabs are wrong examples? WindRide The Indian Car Scene 5 21st March 2010 20:35
LML going up or going down??? devarshi84 Motorbikes 10 7th August 2009 01:32
The value for money SX4 now even more value for money-I map navigator free ram_hyundai The Indian Car Scene 20 23rd October 2008 11:23


All times are GMT +5.5. The time now is 06:07.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks