Collective Failure to understand the market!

rangaraj · 8th May 2006, 16:27

Hi,
Time to look back at the collective wisdom and prediction capability of TeamBHP.. What i am going to say is going to upset a few of you..

I want to bring the attention the reaction of all of our reactions (including me, though they were a few who went against the tide of major thought process) on a prediction: Success/Failure of the Laura..

Most of us felt, it was overpriced car that would be rejected by the marketplace and thought the management was nuts, but it is quite to the contrary.

It looks like they have the only luxury model C+/D segment car that is diesel powered and are leveraging that. The others - sonata is still petrol driven, the elantra does not stand up to the Laura in terms of features/quality/snob value and technical specs besides FE. So they priced it high - most of it felt it was too high to be successful and they got away with it.

Will there be a competitor in this space D segment Diesel powered luxury vehicle to compete with the Laura and bring the price down to a more sane figure?

So, using the example above, the team-BHP'ians, still do not echo, nor voice the buying emotions of the Indian automotive buyer! That is a bold controversial statement.. What say you all?

Laxminarayan · 8th May 2006, 16:35

Well, not sure about the statement.. but yes, the skoda diesel engines does not have competition in the market. Major other players in these segment are petrol.. Yes ofcourse you can take Merc as one of the competitors, but Merc's more expensive than Laura, and given a choice most of them would still pick up the Merc.. I'm still not sure to call "Laura" to be a success or a failure!!!!

deepakhon · 8th May 2006, 16:37

I guess even Skoda had not read the Indian market properly. I guess they had exactly the same idea we had about the market. But the performance of Laura had pleasantly surprised them.

Steeroid · 8th May 2006, 16:45

Does this mean then that the "luxury" segment offerings should have a diesel option to be successful? Amazing, isnt it? You spend 20+ lakhs on a car, yet think in terms of fuel prices...if Ferrari were to start selling in India, they would need a diesel option too.

ajmat · 8th May 2006, 16:45

In positioning it looks that way but in reality, the Laura is an Octavia priced like a Superb. Abroad, the Superb competes with the Sonata.

We cannot really say whether the Laura has succeeded or failed until one sees actual sales

Rtech · 8th May 2006, 16:56

Quote:

the team-BHP'ians, still do not echo, nor voice the buying emotions of the Indian automotive buyer!

Probably not, but thats because the average BHPian knows a lot more about the market, the actual vehicles and what they are, or aren't, worth.

I've said it before and I'll say it again, the Indian Auto market is the most unique one anywhere.

rangaraj · 8th May 2006, 17:00

Quote:

Originally Posted by Steeroid

Does this mean then that the "luxury" segment offerings should have a diesel option to be successful? Amazing, isnt it? You spend 20+ lakhs on a car, yet think in terms of fuel prices...if Ferrari were to start selling in India, they would need a diesel option too.

Interesting point - Below what price would Diesel be preferred to Petrol? There was an article in the economic times today:
http://economictimes.indiatimes.com/...ow/1519764.cms

In a market such as ours where the price of Diesel is artifically lower priced than Petrol, what we discussed is the side effect. In most other countries either diesel is more expensive or about the same price as petrol and therefore price of fuel becomes a non-issue. Out here we have a peculiar situation where it does become an issue, and with the price hikes (and if the subsidy on diesel is going to be maintained) more and more consumers will be drawn towards diesel powered vehicles - especially as the engines are becoming more refined, reliable (no more heater button to be pressed before starting an engine!!) and powerful (though with the traffic these days torque is more applicable!) and therefore diesle is being more favourably considered. I seem to remember one of the moderators mentioning the reasons for going in for a diesel powered merc over the petrol in one of the posts.

So as India is becoming a more diesel oriented economy (wonder what would happen if our FM were to bring parity of prices between diesel & petrol), more car manufacturers will shift their marketing and product planning towards meeting this demand (i would probably excluded Ferrari from the list ;-) )...

Rtech · 8th May 2006, 17:04

Its not just the price of diesel. Its also their inherently frugal but torquey nature that makes it a better proposition for high mileage drivers on our tight, busy roads. Also, with the current crop of refined and fast diesels, we don't really miss petrol engines that much.

rangaraj · 8th May 2006, 17:06

Quote:

Originally Posted by ajmat

In positioning it looks that way but in reality, the Laura is an Octavia priced like a Superb. Abroad, the Superb competes with the Sonata.

We cannot really say whether the Laura has succeeded or failed until one sees actual sales

The funny thing Ajit is that you look at the bangalore roads and you rarely notice a sonata embera, whereas you see a lot more laura's.. Would the scene be different if the embera had introduced the diesel option instead of the petrol - i think yes!
The sad part is that there is no diesel alternative to make skoda price their cars to reflect international price positioning.. It hurts to think we pay twice the price of what our friends pay for the same vehicle in the US or in Dubai..

GTO · 8th May 2006, 18:22

Well, dont single out Team-BHP in that case. Also include the Economic Times, Autocarindia and each and every publication there is.

The Indian market is unique : There are several cases in addition to the Laura which have got it unexpectedly right. Or wrong.

GTO

shuvc · 8th May 2006, 18:36

Quote:

Originally Posted by rangaraj

So, using the example above, the team-BHP'ians, still do not echo, nor voice the buying emotions of the Indian automotive buyer! That is a bold controversial statement.. What say you all?

Well I, for one, did not find it too bold a statement. My perception of T-BHPians is that, we tend to be auto enthusiasts first. The 'value' we look for in a car therefore could very well be different from the general market.

DRC · 8th May 2006, 19:01

We have all gone wrong in our lives, Haven't we?

Think the other way round, when we made a statement/decision/choice, we had convinced our selves for that.

I think, here is T-bhp, we did it exactly, As Shuvc put it, we all thought (including me), Laura is damn expensive, because, we divded the 115bhp by the rupees, and said is expensive, so wont sell. So the bet was more on Accord and embera, which satisfies bhp/Rs. But in large public perception it is not the case. There are still people, more than FE alone, who have bought the car for its snob value, array of gizmos associated with it , and MANY just by the example of the success of Octavia.

My 2 cents!

tifosikrishna · 8th May 2006, 19:05

Quote:

Originally Posted by rangaraj

So, using the example above, the team-BHP'ians, still do not echo, nor voice the buying emotions of the Indian automotive buyer! That is a bold controversial statement.. What say you all?

Hi, i came to a similar conclusion when i conducted this poll, http://www.team-bhp.com/forum/indian...istically.html

this was my conclusion

Quote:

Originally Posted by tifosikrishna

hey guys,by this poll i thought we will have a rough idea of how close we represent the actual market.

assuminig that voting is sincerely based on the question posed,voting pattern till now suggest palio as a favourite car, where as reality is something else.

it makes me think what relevance does the view point of a small community like us (more oriented towards performance) hold to automobile manufacturers in making their future decisions.

other inference that i could make out is majority of the voters in the forum belong to higher income bracket (upper middle class and above) and arent bothered about things like FE,maintenance,re sale value etc..

what do you think guys...

Revvmaster · 8th May 2006, 19:20

Have a look at Laura's sales figures. Ever since launch, the Laura has averaged 200 units a month. Read that again, 200 units! In March, Honda sold 97 Accords. Honda has averaged between 100 and 150 units in the last 6 months, Laura's been around for 4 months now. Success then? Initial response seems to say yes. Skoda in fact until April had a huge inventory problem, not enough to make the number of cars the market demanded. Skoda being pleasantly surprised? You bet!

In Mumbai, the Laura is priced a little less than a lakh of rupees more than the Accord (on-road). What one gets with the Laura is something even the Accord can't match. Like DSG, ABS, TC, ESP, Cruise control etc. Now do a run-up of the cars available in our country which have such features and more. I don't even need to give you the pricelist of such cars.

Hyundai comes out with the Sonata diesel in December. Worth waiting for, for sure. As for Skoda, they can enjoy 2006 for all they care. Diesel cars have a demand even in the Rs.15-20l akh bracket. Heck, look at E270CDi numbers and compare it to the E240 sold till date and the CDi has a lead over the petrol. Fine, most of these cars are provided by companies to their guys at top, yet the numbers speak for themselves.

Diesel engines have come a long long way. And people no longer mind owning a diesel even in the D-segment. It's rather easy to write off cars like Rangaraj said, but the market can throw up surprises even your wildest imagination can't fathom.

Revv

DRC · 8th May 2006, 19:24

@tifosikrishna, Majority of the people here in this forum are car freeks, irrespective of the income group, and personal preferences..

Though many here only talk about BHP, there are equally big number who ask what is the FE.

Market has its own trends, I do not think t-bhp is the forum, which is introspecting how accurate we are with respect to the market..

8th May 2006, 16:27	#1
rangaraj BHPian Join Date: Sep 2005 Location: Bangalore Posts: 570 Thanked: 10 Times	Collective Failure to understand the market! Hi, Time to look back at the collective wisdom and prediction capability of TeamBHP.. What i am going to say is going to upset a few of you.. I want to bring the attention the reaction of all of our reactions (including me, though they were a few who went against the tide of major thought process) on a prediction: Success/Failure of the Laura.. Most of us felt, it was overpriced car that would be rejected by the marketplace and thought the management was nuts, but it is quite to the contrary. It looks like they have the only luxury model C+/D segment car that is diesel powered and are leveraging that. The others - sonata is still petrol driven, the elantra does not stand up to the Laura in terms of features/quality/snob value and technical specs besides FE. So they priced it high - most of it felt it was too high to be successful and they got away with it. Will there be a competitor in this space D segment Diesel powered luxury vehicle to compete with the Laura and bring the price down to a more sane figure? So, using the example above, the team-BHP'ians, still do not echo, nor voice the buying emotions of the Indian automotive buyer! That is a bold controversial statement.. What say you all?
	() Thanks

8th May 2006, 16:35	#2
Laxminarayan BHPian Join Date: Apr 2006 Location: Bangalore Posts: 170 Thanked: 0 Times	Well, not sure about the statement.. but yes, the skoda diesel engines does not have competition in the market. Major other players in these segment are petrol.. Yes ofcourse you can take Merc as one of the competitors, but Merc's more expensive than Laura, and given a choice most of them would still pick up the Merc.. I'm still not sure to call "Laura" to be a success or a failure!!!!
	() Thanks

8th May 2006, 16:37	#3
deepakhon Senior - BHPian Join Date: Oct 2004 Location: Bangalore Posts: 1,441 Thanked: 65 Times	I guess even Skoda had not read the Indian market properly. I guess they had exactly the same idea we had about the market. But the performance of Laura had pleasantly surprised them.
	() Thanks

8th May 2006, 16:45	#4
Steeroid Senior - BHPian Join Date: Mar 2005 Location: N.A Posts: 7,046 Thanked: 2,751 Times	Does this mean then that the "luxury" segment offerings should have a diesel option to be successful? Amazing, isnt it? You spend 20+ lakhs on a car, yet think in terms of fuel prices...if Ferrari were to start selling in India, they would need a diesel option too.
	() Thanks

8th May 2006, 16:45	#5
ajmat Team-BHP Support Join Date: Feb 2004 Location: Bangalore Posts: 14,886 Thanked: 28,107 Times View My Garage	In positioning it looks that way but in reality, the Laura is an Octavia priced like a Superb. Abroad, the Superb competes with the Sonata. We cannot really say whether the Laura has succeeded or failed until one sees actual sales
	() Thanks

8th May 2006, 17:04	#8
Rtech Team-BHP Support Join Date: Apr 2004 Location: Bombay Posts: 5,770 Thanked: 359 Times View My Garage	Its not just the price of diesel. Its also their inherently frugal but torquey nature that makes it a better proposition for high mileage drivers on our tight, busy roads. Also, with the current crop of refined and fast diesels, we don't really miss petrol engines that much.
	() Thanks

8th May 2006, 18:22	#10
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,624 Thanked: 301,417 Times View My Garage	Well, dont single out Team-BHP in that case. Also include the Economic Times, Autocarindia and each and every publication there is. The Indian market is unique : There are several cases in addition to the Laura which have got it unexpectedly right. Or wrong. GTO
	() Thanks

8th May 2006, 19:01	#12
DRC BHPian Join Date: Dec 2004 Location: Cockpit Posts: 911 Thanked: 64 Times View My Garage	We have all gone wrong in our lives, Haven't we? Think the other way round, when we made a statement/decision/choice, we had convinced our selves for that. I think, here is T-bhp, we did it exactly, As Shuvc put it, we all thought (including me), Laura is damn expensive, because, we divded the 115bhp by the rupees, and said is expensive, so wont sell. So the bet was more on Accord and embera, which satisfies bhp/Rs. But in large public perception it is not the case. There are still people, more than FE alone, who have bought the car for its snob value, array of gizmos associated with it , and MANY just by the example of the success of Octavia. My 2 cents!
	() Thanks

8th May 2006, 19:20	#14
Revvmaster Senior - BHPian Join Date: Feb 2004 Location: Bombay Posts: 1,190 Thanked: 95 Times	Have a look at Laura's sales figures. Ever since launch, the Laura has averaged 200 units a month. Read that again, 200 units! In March, Honda sold 97 Accords. Honda has averaged between 100 and 150 units in the last 6 months, Laura's been around for 4 months now. Success then? Initial response seems to say yes. Skoda in fact until April had a huge inventory problem, not enough to make the number of cars the market demanded. Skoda being pleasantly surprised? You bet! In Mumbai, the Laura is priced a little less than a lakh of rupees more than the Accord (on-road). What one gets with the Laura is something even the Accord can't match. Like DSG, ABS, TC, ESP, Cruise control etc. Now do a run-up of the cars available in our country which have such features and more. I don't even need to give you the pricelist of such cars. Hyundai comes out with the Sonata diesel in December. Worth waiting for, for sure. As for Skoda, they can enjoy 2006 for all they care. Diesel cars have a demand even in the Rs.15-20l akh bracket. Heck, look at E270CDi numbers and compare it to the E240 sold till date and the CDi has a lead over the petrol. Fine, most of these cars are provided by companies to their guys at top, yet the numbers speak for themselves. Diesel engines have come a long long way. And people no longer mind owning a diesel even in the D-segment. It's rather easy to write off cars like Rangaraj said, but the market can throw up surprises even your wildest imagination can't fathom. Revv
	() Thanks

8th May 2006, 19:24	#15
DRC BHPian Join Date: Dec 2004 Location: Cockpit Posts: 911 Thanked: 64 Times View My Garage	@tifosikrishna, Majority of the people here in this forum are car freeks, irrespective of the income group, and personal preferences.. Though many here only talk about BHP, there are equally big number who ask what is the FE. Market has its own trends, I do not think t-bhp is the forum, which is introspecting how accurate we are with respect to the market..
	() Thanks