[Contrapunto]

Originally Posted by rangarx

The herd mentality of Indian consumers could not be beaten by any ethnicity! Wow! IMHO, Punto, Zest, Beat are not bad products at all. The cramped and rattling swift rules the roost. Simply unable to understand. Same goes with Innova and Fortuner at MPV and SUV markets. People's decision is final. I think this kind of market share trend is here to stay. At least until Hyundai catches up really close to the Suzuki.

Why just Punto, Zest, Beat? Even Indica eV2 wasn't a bad product as well. Quite good, in fact, for its price. It was well powered, tractable, and with a nice, smooth gearbox. But I sold it after a couple of years and will NEVER buy another Tata car till at least 5 close friends attest from personal, long-term, ownership experience. Why? That is the story for another thread, for another day.

The herd mentality for rattling Swifts, and Neolithic Innovas (I have one) are well known to those who own them :-) . Its a pity- yes. Its a sad commentary on the state of the Indian car market- definitely. But illogical it is NOT.

[romeomidhun]

Originally Posted by Contrapunto

The herd mentality for rattling Swifts, ...

'Rattling swift' is a story of the past. The current gen swift is a well-put-together model.

[thoma]

I am just wildly wondering.....

Aren't these global leaders fed up and demoralized with garnering poor market share year after year? The usual practice of global players in many an industry would be to exit the country at the earliest. Have they really tried every trick in the book and lost at it? I guess the only way to usurp the giants is to plot wicked ploys to dent their image, but glad that no one has turned to unethical means yet, or am I wrong?

Or are they plain complacent? I guess yes. Because the best example to prove this would be Hyundai. They tried, tried and tried till they came up. They developed long roots (dealerships) to reach different parts of the country and kept developing fruits (new models) to attract birds and finally a strong marketing.

[classact]

The main reason for ford, fiat, chevy etc to fail in Indian market is that they don't release their latest and greatest products here. If they do that then it'll become unaffordable :( . So it's a difficult situation, needs some visionary to crack this.

[jetti]

Originally Posted by Contrapunto

...
The herd mentality for rattling Swifts, and Neolithic Innovas (I have one) are well known to those who own them :-)

The herd mentality for these ends up in very good resale value and thus adds to the herd. Kind of working like a Network Effect

No major surprises in the results. The numbers of Lodgy will be closely watched by all and it will take several months data for the sales to reach equilibrium. Honda's numbers again see the fluctuations within their models which we see every month with the total of all remaining roughly similar.

[ramassrs]

Excellent analysis - as usual.

I am struck by one contrast of sorts - if I can call it that.

Suzuki is a marginal player in the US Auto market whereas they are leading by a huge margin here. Similarly, the likes of GM, Ford, Toyota are some of the strongest brands with very good sales in the US but weak here.

All of these top names probably have the best technology at their disposal and I assume that they have the means to produce the most optimal product for a given target consumer, regardless of the geography.

Yet, they are unable to leverage on their successes in the markets where they operate and repeat it elsewhere where they arent so strong.

I am sure there are enough management gurus in this forum who can help explain this - why is GM unable to improve market share DESPITE being here in India for so long? Likewise, why isnt Suzuki unable to penetrate the US market despite being there for a long time?

To me, it is very interesting thinking about these contrasts and wondering WHY arent the key guys in these companies unable to replicate success of one market in the others.

[volkman10]

Originally Posted by ramassrs

Suzuki is a marginal player in the US Auto market whereas they are leading by a huge margin here.,,,
why is GM unable to improve market share DESPITE being here in India for so long?

Suzuki had exited the US Market in 2012, after failing to earn profits there.

You can seen GM's portfolio here in India and is no surprise why their are in this position. Mediocre products and very bad marketing. No USP in any of them nor any cutting edge technology to cut into the market.

Quality and recalls are also an important factor to note and could be reasons to justify their current position here.

[BlueJay]

I think there are players who consider India as the key part of their strategy and there are players who just want to have a presence in india. The first category players make a long term business plan and provide for negative cash flow initially to get the infrastructural items (read dealership network, vendor network, endurance tracks etc) to some shape. They also launch models which are designed keeping India in mind. The other category players take a short term view and treat each launch as a profit making venture hence they don't focus on infrastructural items, they pick up a depreciated model from other country and introduce it here to keep the cost structure low.

[apachelongbow]

Commenting only about the Tatas, I would say their basic problem is with their management team, the personal in the middle and senior management have been there too long and are too complacent, to even know about what needs to be done to get out of the current rut.
The kind of upgrades they have been doing on the Storme, the Sumo or even the Indica/Manza and Nano platforms, is at best half hearted. A proper survey of the market, their target audience, the needs and wants, the price points and the required equipment and features is simply not done.
The second issue is not having competent dealers. The existing lot of dealers are a demoralized lot, and speaking to the average service advisor or salesman one can see that they would rather recommend a competition's product than praise their own. This coupled with some shady practices and lack of service etiquette has made people shy away from Tata products.

Even though the Zest, the Bolt, the Aria and Storme are competent products which are priced well and are equal or better than the competition, the excess baggage the brand carries along with the dealer attitude and lackluster middle management is dragging sales down.

What is needed is a immediate thinning of the middle and senior management herd, hiring of innovative young persons from within the industry or outside and clean up of the dealer network bigtime. May be set up a new chain of dealerships, keeping the commercial dealers and taxi operators separate, and getting a new advertising or brand management agency to clean up the existing image. A turn around is very much possible, if the lethargy and inertia are eliminated.

[mi2n]

While the market leaders are posting consequent record breaking numbers, the situation seems really bleak for the laggards and it's effect has started to show on the buyers. The Chevy A.S.S. is degenerating fast. With low numbers, dealerships are shutting down, experienced service advisers are moving away and are being replaced by cheap nonsense. Accompanying the spiraling service costs are utter incompetence. During the last year, 2 GM dealers in Kolkata have shut shop, the A.S.S. has gone nuts, not even capable of basic troubleshooting let alone repairs. I have stopped using Chevy A.S.S. for my Beat as they have become totally useless.

As for Tata, I can thoroughly relate to the situation in their organization as I have faced similar situation at work. Perfect case study would be the Storme - New Hydro-formed Chasis, new suspension, new clutch, new GB, now new engine, new dashboard, new so many things, but why shove the old body shell on this 90% new product ? This has happened to me too, while allowed to pursue our goals in new ways, right at the time of finalization, the archaic top level management would forcefully induct some of their old ideas into the new idea irrespective of whether it fits the scheme of things. The other day, a cabby shouted in exclamation, " look sir, a big Vista!". I laughed unstoppably! A Tata Aria just overtook us. Ditto with the Bolt. New(not so) Revotron, plush interiors, AMT, feature that puts 15 lakh sedans to shame, but still retaining the Vista shell. This, when the others are mounting new body shells on relatively dated platforms and engines with flourishing sales. Case in point - Duster on Logan platform.

[humyum]

Originally Posted by mi2n

While the market leaders are posting consequent record breaking numbers, the situation seems really bleak for the laggards and it's effect has started to show on the buyers. The Chevy A.S.S. is degenerating fast. With low numbers, dealerships are shutting down, experienced service advisers are moving away and are being replaced by cheap nonsense. Accompanying the spiraling service costs are utter incompetence. During the last year, 2 GM dealers in Kolkata have shut shop, the A.S.S. has gone nuts, not even capable of basic troubleshooting let alone repairs. I have stopped using Chevy A.S.S. for my Beat as they have become totally useless.

As for Tata, I can thoroughly relate to the situation in their organization as I have faced similar situation at work. Perfect case study would be the Storme - New Hydro-formed Chasis, new suspension, new clutch, new GB, now new engine, new dashboard, new so many things, but why shove the old body shell on this 90% new product ? This has happened to me too, while allowed to pursue our goals in new ways, right at the time of finalization, the archaic top level management would forcefully induct some of their old ideas into the new idea irrespective of whether it fits the scheme of things. The other day, a cabby shouted in exclamation, " look sir, a big Vista!". I laughed unstoppably! A Tata Aria just overtook us. Ditto with the Bolt. New(not so) Revotron, plush interiors, AMT, feature that puts 15 lakh sedans to shame, but still retaining the Vista shell. This, when the others are mounting new body shells on relatively dated platforms and engines with flourishing sales. Case in point - Duster on Logan platform.

You know, when companies can't think out of the box, they will soon enter a box. Selling cars in India is to touch the 'sentiment' of the people, a nerve of pride accompanied by a hint of class which Indians are very conscious about. IF you touch that combination right, the war is won.

I ll give you an example, I live in Ghatkopar - Mumbai, an area filled with 99% Gujaratis. All my friends when I have spoken about them buying a Bolt or Zest their response has been 'Hat hat, I don't want a Taxi'. Even when I have told them what the car has as compared to its competition, most of them have ended up buying an Xcent, I20, I 10, Dzire, Swift and whatever comes around that budget. No one has touched the Bolt or Zest. Reason ? Image problem. ( I am a Gujarati myself so no offence to any Gujjus)

I don't know why Tata's in all these decades never learnt that and chucked the Indica and its permutation combination platforms and made something NEW. Like they say, when in a hole stop digging.

[sanstorm]

Great thread as always.

I am bit confused with Nissan's weird advertisement of Terrano and the puchline , a tall claim, India's best selling SUV. Remember the one with Sushant Singh dancing and a groovy Terrano joining before a driver zoom it off.

The monthly sale figures and road glimpses at least dont suppport the claim. A dance-off or put-off

[avdhesh15]

GTO - good to have your analysis back after long!

I believe that Maruti and Hyundai will go even more strength to strength once their compact SUVs are launched which would reduce Ford's one-hit strategy. Once that is done, am sure Ford will be fighting with fellow Western folks for bottom of the table (GM, Fiat, etc).

As I have said almost every month, Swift and Dzire sales are just amazing and so is the City's sales figures turning out to be. I just hope Honda doesn't become over confident with City's success and churn out duds like Mobilio - I hope they are aggressive with the new Jazz in terms of pricing against the i20 and upcoming YRA.

Look forward to next month's analysis once again!

[cingsman]

What's up with the Elite i20, breaking all imaginations! Wow!

The Nano GenX (did I call it correctly?) should start adding to the numbers for the Tatas come May.

VW continues to have its steady stream of customer who value build quality over newer designs or features!

Honda - please do not cheapen yourself out. Short term numbers (Amaze, Mobilio) will not help you in the long run. The Indian consumer will cheapen you out and then throw you off of their consideration set! Ask the Tatas!

[SS8939]

So let's take a look at Honda's case here.

1.They decided to sacrifice the premium image they had built for decades to bring up the volumes.

2. They had this image of making cars which were about sheer driving pleasure. In a bid to increase volumes they introduced a diesel engine which is way below Honda's standards and unrefined.

3. They were known to make cars which were built well. Again volumes=lesser profitability=they have to skimp somewhere. Take a look at the build quality of their lower end cars like the Brio, Amaze etc.

So in conclusion, isn't it safe to say that Honda's strategy to go for volume instead of profitability isn't going all that well? I personally think, they too should have played the Value luxury' card like Skoda. Honda did have the brand value after all.