Team-BHP (https://www.team-bhp.com/forum/)

-   The Indian Car Scene (https://www.team-bhp.com/forum/indian-car-scene/)

-   -   Positioning snafus in Indian Car Market (https://www.team-bhp.com/forum/indian-car-scene/18207-positioning-snafus-indian-car-market.html)

I have been thinking about this for some time. The thread on VW and Sonta got me thinking some more about this. Didn't find relevant threads to discuss. Mods, If I missed it please merge with relevant thread.

Lets think about what are various segments in car industry from needs perspective, meaning what are needs of individuals and where do various models fit in. For this discussion, I have limited this to cars under 20L and excluded SUVs from this.

1. want four wheels - Don't care as long as their ride has 4 wheels. 800 and Omni fit here
2. First real car.First car for most of the folks. Usually upgrade from 2 wheels. Need to transport one (or family) from point A to point B. Alto, Santro, indica etc.
3. Need a car with boot but can't afford much. Those who have a need to own a car with a boot because either they need or boot or because they feel better driving a 3 box car thinking they have moved upwards in food chain. Esteem, Indigo, Accent, Ikon Flair etc bit the bill. VFM is the name of the game here.
4. Need a refined multipurpose car for the family. Can't afford/Don't want the luxury but want reasonable power and refinement. Fiesta, Avea, NHC, Verna, entry level Optra are the cars in this segment. Reliability and VFM is highly desirable.
5. Need to differentiate and want entry level luxury.The people in this category like to differentiate themselves from average Joe. Can't afford luxury cars yet but needs to rise above the ordinary. Civic, Octy and Corolla.
6. Executive cars. Need a good luxury car which conveys the statement that a person has arrived. Accord, Camry, Laura are the cars of choice here along with CRV (I said I would avoid SUVs but couldn't resist).
7. Performance enthusiast. Boy racer, wants a fast car which handles well at the cheapest price :). This is a niche which is satisfied today by Baleno, Palio 1.6, Fiesta 1.6, RS (and some people say NHC VTEC) in various price ranges.

This frameworks explains several situations. Notice a company can mess up big time by having a same model straddle different segments (in some cases they can even take advantage of it). Take for example Optra. Initially it was positioned in segment 5 above. When they moved it to 4 by introducing a lower end version, buyers from segment 5 started to go away from it.

Similarly it also explains the stupendous success of Honda is each segment. Their offerings are clearly targeted towards different segments with no overlaps or confusion. It is easy to see that with Corolla becoming commonplace and dated, segment 5 flocked towards Civic. Toyota (Corolla) is trying to stretch segment 5 towards 4 by lowering the price but by doing that they will alienate more of segment 5 folks above (making the similar mistake as Optra). Bad move for Corolla in my opinion.

Take the case of Hyundai Sonata. It was initially positioned in the executive segment. I don't know of many who would like to announce their arrival in that class by buying a Hyundai. Brand really starts to matter there.

By lowering their prices though, they are squarely targetting the segment 5 buyers above. I think it is a good move. However to make it successful, they need to really market this move and tell all the potential customers about this car and how it compares with Civic etc.

Interestingly that leaves no space for Elantra's positioning. Ideally, its positioning should be at the lower end of segment 5 to lure segment 4 buyers. However, as long as Corolla is available at lower prices, there is no room for Elantra.

One could do a similar segmentation for SUV buyers and it is so obvious that there is a huge hole in the market for a 12L SUV which is refined. We discussed that some time back on one of the threads.

Nice split-up, dude. Let's hope the Sonata doesn't go the (Daewoo) Cielo way after the cut in prices. That would be a pity.

Nice explanation dude.

I dunno, but me thinks otherwise for Corolla. People very much respect the Toyota name and so does the Corolla brand name. So even if it's dropped down a segment, it should sell. As it's done intentionally to get the Wannabe buyers of a higher 4segment car. He will be very much interested in putting his money into the 5segment car which is very much respected.

Where would the superminis fit in?

@speekzak: If Corolla's strategy succeeds, they do get lot of buyers from segment 4 but they will lose segment 5 then. Do they want to leave that to Civic and Octy ?

@theMAG: By superminis in Indian context, do you mean cars like Swift and Getz ?

This is where the car makers play their cards. Once you get a buyer from the segment4 to buy a segment5 car, they dont leave him there. When the next Corolla is launched, they'll make it so mouthwatering for this buyer that he wont think about any other car as his next one.
It's a gamble though.

Spot on. The Swifts, Getzs, Aveo-UVAs, Honda Jazzs etc.

The best example illustrating this point[although pertaining to different segment of cars]
Toyota qualis customers upgradation to the Toyota Innova

Toyota is big expert in doing that. Just look at the drivers of yesteryears' Corollas in other parts of the world. They all have matured to buy more bigger Camrys or the newer corollas.

BTW, Where does the MUVs stand? We need more info on these. Somebody please!!!

I missed it. Consequence of late night posts :)

I believe this segment that is not so well defined in India yet and would go ahead and say that need for segment 2 applies here as well. What do you think ?