It's obvious that most, if not all, of the following manufacturers have a deep understanding of the Indian car market. After all, they have had the blockbuster product or two. There is no denying the talent either; large auto manufacturers have some truly bright brains at the top, and usually hire the smartest out there. Plus, their research, marketing & advertising budgets run into several crores of rupees.
Yet, the following much-hyped products have ended up as duds in the Indian market. At the time of launch, a layman like me pronounced the Aria, Jazz, Kizashi, Fiesta etc. as being severely over-priced. Most of you also agree on the overpriced nature of the cars listed below. How come it wasn't as obvious to the geniuses at corporate headquarters? Fact is, the automotive landscape is extremely competitive today, and it's clearly a buyers market now. Overpriced cars will simply NOT sell....value is the new king.
My question is simple : How did the respective auto brands, with all the money, talent & research in the world, think they'd get away with it? What kind of research have they been really conducting? Did common sense ever figure in the brainstorming sessions? It's sad because each of the following cars brings a competent offering to its respective segment. Wasn't there one person of authority who put his hand up and said "Waitaminnut guys, I think we are completely missing the mark here"?
Tata Aria
Monthly sales average (2011) = 263. Competitors like the XUV500 sell out 4 months of production in a little over a week of launch, while the Fortuner maintains its stellar 1000 units / month performance.
A giant leap ahead for Tata, the Aria is engineered like no other car from the brand. Excellent quality, equipment and overall product. But 18 lakhs on the road in Mumbai (over 20 in Bangalore)? Whoever signed off on the Aria's pricing was seriously out of touch with reality. A short while later, the Mahindra XUV500 comes along and makes the Aria look even more over-priced than we initially thought. Sorry Tata, even the 4x2 isn't going anywhere too soon.
Honda Jazz
Monthly sales average (2011) = 361. Meanwhile, the other premium hatchback - Hyundai i20 - touches 8,000 sales in some months!
Sure, Honda recently corrected the Jazz pricing with a whopping 1.5+ lakh discount, but that doesn't take away from the fact that the premium hatchback was a market failure for 2 years (and still hasn't really recovered). 8 lakh rupees on the road for a car without alloy wheels or even a parcel tray!! Heck, the Hyundai i20 suddenly looked like value-for-money. In fact, it was after the Jazz' introduction that i20 sales shot through the roof. What was Honda thinking? Right then & there, they lost an opportunity on a potential 6,000 unit a month seller.
Ford Fiesta (new)
Monthly sales average (2011) = 610. The Honda City & 2011 Hyundai Verna clock anywhere between 4,000 - 5,000 cars a month. The Volkswagen Vento manages an average tally of 3,000. Sales of the previous-generation Fiesta actually increased after the 2011 Fiesta's launch.
You'd think Ford learned of India's obsession with value-for-money after the Figo's success. Evidently not. Ford's attempt at pricing the Fiesta
above the City, Verna and Vento was disastrous. If a car fails to gain traction in the initial months from launch, you can bet that price cuts are inevitable along the way. I can't think of a single car that was overpriced at launch, and managed to gain volumes without a price cut in the long run. Expect special editions, discounts and even a price correction soon.
Renault Fluence
Monthly sales average (2011) = 193. In only it's 4th month on sale, the Fluence managed a mere 100 sales.
A 15 lakh rupee diesel car without USB audio input, climate control or leather seats
. On the other hand, a fully loaded petrol automatic, at a time when the market detests petrol ATs (high petrol prices + poor fuel efficiency). Only one variant with either engine. You'd think that Renault lost a bet. What else can explain the woefully poor launch strategy of the Fluence? Did Renault honestly expect to put up a fight to the mighty Toyota Altis, Chevrolet Cruze, Skoda Laura, VW Jetta & Honda Civic with this weird positioning? Marketing failure 101 (or "How NOT to launch a premium sedan").
Skoda Yeti
Monthly sales average (2011) = 186. Sits at the bottom of the pile in the premium SUV segment. Every other 10 - 20 lakh SUV, even the old antique Pajero, outsells the Yeti.
Actually, one of the best engineered soft-roaders in the market today. The engine, ride, handling & overall quality are unmatched. However, it looks too small for the price. Indians usually like their SUVs big & butch. Skoda completely missed the mark with the Yeti's pricing.
Maruti Kizashi
Monthly sales average (2011) = 37. The Honda Accord & Skoda Superb sell 7 - 9 times as much.
Previous generation Vitara? Flop. Current gen Grand Vitara? Flop. Maruti still knows absolutely nothing about the premium segment & the Kizashi is proof. Why else would they price the Kizashi - a car with the interior space of an Altis & Civic - at 20 lakhs on the road? The Kizashi can't match the Superb or Accord on comfort, space or perceived value. Plus, the Maruti brand simply doesn't meet the aspirational needs of the 20 lakh customer. The only way to overcome the brand disadvantage would be to price the Kizashi well...something Maruti miserably failed at. Chevrolet realised the brand deficit they had, and priced the quick Cruze incredibly well. Result? The Cruze even outsells the Altis from time to time.
Mitsubishi Montero
Monthly sales average (2011) = 6. The Audi Q7 does 10X that in most months. while the pricey Porsche Cayenne does 25 units (averaged). Clearly, there are a certain number of 50 lakh SUV customers who turn away from the Montero.
I have a grudge against Mitsubishi for this one, primarily because I LOVE the Montero. In my books, its one of the best SUVs ever sold....and right up with the Landcruiser. The pre-facelift Montero debuted at 35 lakhs, but didn't find any takers at that price. HM-Mitsubishi's reaction? Shockingly, to raise the price even more. In the last 3 years, the Montero's MRP has done a yo-yo between 40 - 51 lakhs. It didn't sell then, and it won't sell now. Hindustan Motors has sealed the Montero's fate in India.
Renault / Mahindra Logan
Sales before the price cut = About 500 units a month. This at a time that the Dzire frequently managed 7,000 - 9,000 sales, and the Indigo / Manza sisters about 5,000.
Now known as the Verito, the erstwhile Logan is a cheap sedan that is built to strict costs. It feels cheap inside out and doesn't even get proper door handles. Yet, when Mahindra-Renault introduced this sedan, it was priced at about a lakh more than the Tata Indigo (the other cheap workhorse). Result? A universal thumbs down from the masses. The Logan performed so poorly that it led to a divorce between Mahindra & Renault. The rebadged Verito is seeing better times now (1,500 sales / month), but that still isn't a patch on what other entry-level sedans do.