Team-BHP
(
https://www.team-bhp.com/forum/)
I just read a news item in NY Times that says Ford also might leave India. It was an article about Ford getting a new CEO in the US and towards the end talks about this...
Quote:
"They also suggested Ford might need to shed some unprofitable business units or drop out of global markets like India, where it is struggling to maintain a foothold — an unwinding similar to the way G.M. is repositioning its business under its chief executive, Mary Barra."
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Link to article --
https://www.nytimes.com/2017/05/22/b...m-hackett.html
With the kind of lineup a typical Chevy showroom had in the past 5 years, this was more or less expected. It was just a matter of time when someone at the top would take this decision. First Russia, then Europe, South Africa and now India.
Owned a pre-worshipped Spark for 2 years and never had any major issues. Though I admit I always took it to a FNG for any problems. Lovely car let down by bad management. Good bye Chevy.
Quote:
Originally Posted by Krishnan83
(Post 4203637)
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The US Auto market is in a very fragile situation and the first victims of this will be the 3 american manufacturers.
Similar to the Housing crash following the sub-prime crisis, the Auto industry fears a similar situation due to rampant and unchecked lending in the consumer auto sector. Basically lenders, dealers, manufacturers have made easy credit available to people who cannot afford it to ramp up demand, now it is catching up on them!
Quote:
Compounding the problem, pent down demand is exacerbated by debt -- a lot of debt -- amassed on top of the old debt, which fueled the bubble that preceded the Great Recession. This was documented by a McKinsey report—US auto loans have crossed $1 trillion lately.
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Quote:
There has been a significant drop in new car sales and a sharp increase in the delinquency rates of subprime borrowers. Inventories across the country have started to build up, and if things don’t turn around soon, the excess cars sitting on lots will eventually force prices lower. According to analysts at Morgan Stanley, price declines will also impact the used car market, and some predictions are calling for up to a 50% decline by 2021.
Millions of borrowers who bought cars on credit could see the value of their vehicles plummet yet still have to pay off their full loan amount. It’s similar to 2008 when the mortgage market collapsed and plunged home prices across the country dramatically lower. Property values fell so much that people suddenly owed more on their homes than they were worth. Those homeowners then had to make the decision of whether to wait it out and keep paying their inflated mortgage rates or cut their losses and sell. Cars, on the other hand, have never been an investment, and this kind of situation in the auto industry would likely trigger an avalanche of private sales as people try to get out from under their debts.
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The manufacturers know this and will limit exposure as much as possible. The American 3 cannot exit the US market, but everything else will be on the table to be chopped!
It will be interesting to see events unfold over the next few months!
Sources:
Forbes
https://www.forbes.com/sites/panosmo.../#1f5fdbfd1660
Crux
http://thecrux.com/remember-the-hous...ubble-of-2017/
After hearing rumours of GM impending exit which sadly became reality, I am in dilemma now whether to sell my 2 year old Ford Ecosport as I fear Ford will also annouce its exit suddenly like GM. The only problem is that there is loan which will end in 3 years time. I don't know what to do know.:Frustrati
Ford is doing good business right now. EcoSport is a fast mover despite being 4 years old and without a facelift (you can't say this about any car doing this except maybe a few Maruti and Hyundai ones).
The aspire sells in enough numbers to at least keep selling it. The Figo is the only one that's not selling, and even Bhpians have no idea why, maybe the weak petrol. And the Endeavour is also selling in good numbers for it's price (although no match for the fortuner). And Ford has been exporting more than it's Indian sales for many years now, so it's not something to worry about now. You can walk into a Ford dealership right now to see the state of the Ford vs GM in India, it's much better to say the least.
Ford has to be really lazy with its products to mess it up (Read: not launching the next fiesta based cars)
Sad news. The new Cruze which believe is already on the roads in the USA, would have been a great offering by Chevrolet in that segment. Great looks, competent diesel and petrol engines. Probably would have given a stiff fight to the Elantras of this world. Sigh, not to be.:Frustrati
Quote:
Originally Posted by Krishnan83
(Post 4203637)
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Sad to see GM go, but logically, it makes sense since they were'nt selling in large numbers in a volume market like India. They had some good models, which did see very good numbers initially, like the Tavera, Beat, Cruze, but they could'nt sustain these numbers for various reasons.
Fiat seems to be heading in the same direction too, going by how their model lineup is not getting refreshed and they dont have any dealers in major indian metros like Bombay. They now have one dealer, but he's just not interested in selling, so I'm sure they're not getting any sales in Bombay.
Its quite likely that Ford will follow suit. Many American organizations have the same consultants, so they follow a herd mentality in that sense. They explore new markets together and also exit markets together.
Ford has a good linup with the Ecosport, Figo, Aspire and Endeavour. These models are fundamentally good, and Ford has put in a lot of effort in localizing them as well as reducing the prices to make it more in line with the prevailing prices in the Indian context.
Hence, I really want them to succeed, so that the Indian consumer has more variety and choice. Having only a few dominant players like Maruti, Hyundai, VW, Tata, M&M etc... is not good for the Indian consumer or the Indian automobile market in the long term.
Quote:
Originally Posted by FrozeninTime
(Post 4203737)
After hearing rumours of GM impending exit which sadly became reality, I am in dilemma now whether to sell my 2 year old Ford Ecosport as I fear Ford will also annouce its exit suddenly like GM. The only problem is that there is loan which will end in 3 years time. I don't know what to do know.:Frustrati
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I think you are doing some fear-mongering here. Unfortunately many of us associate cars with their country of origin or nativity, like American cars, Japanese cars, European cars, Korean cars etc. This may be a copy paste from 1980's US during the 'Japanese' car invasion.
Another thing we give overwhelming priority is looks. A rather low quality car if it looks fantastic, there will be a large buyer base. Then we realize it really late. GM is a good example here.
Then there is order of perceived quality. Japanese the best then may be Korean and so on until you hit some of the Indian cars. Innova having several (dozen plus) launch issues is ok but Ford having 1 or 2 is a big NO. Ford is bad boy. Japanese quality is peace of mind. BTW Maruti is still Japanese for many.
A average looking 'Japanese' or 'Korean' with poorer features will out-sell an 'American' with better looks and features. This perception is very unhealthy for the automotive market. 60% of market is cornered by 2 companies. One Japanese and other Korean. Why would Tesla come? Will they loose to a Japanese competitor later ?
If you look into the recent history (10 yr) of GM you will see that their automotive operations near consistently made loses but their financial side helped them tide over and make overall profit. So it was basically a bank. This setup works only when they can sell in huge volumes (example USA) which again driven through discounts (of course at loss) but you make money from GM financing (interest rate). This failed in India as the sales volume never reached the minimum levels to sustain a banking operation nor the product could command premium pricing. Ford is no bank. It is a proper automotive company with a fantastic line up.
So let us stop associating Ford with GM just because both are 'American'. Ford makes some very good quality cars that would beat some of the offerings from Honda or Hyundai. But then does it matter? It is an 'American'. Sigh!!
GM's India exit could leave dealers bankrupt and over 7,000 jobless http://economictimes.indiatimes.com/...w/58819084.cms Quote:
“There are hints that GM wants to pay a compensation to the tune of Rs 60 lakh to Rs 75 lakh per dealership which is very less. The cost on setting up a dealership minus land is no less than Rs 2 crore to Rs 5 crore depending on city,” points out one of the dealers.
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Quote:
These more than 120 outlets are currently selling Chevrolet cars and some of them have been dealers since the company started its operations. Each of them have 70 to 150 employees which turns out to be over 10,000 people of which they fear that there could be a job loss of over 7000 in the coming few months. Some people may lose their jobs in the immediate future.
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Quote:
Since 1994, GM has sold about 1 million cars in India of which about 5 lakh vehicles are still on road; however, in the last three years only about one lakh vehicles were sold which would be actual customers. Studies suggest that after warranty period gets over people move to a local repair shop to save cost. While, as the number of vehicle/customers fall the workshop also at times start overcharging the customers.
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Quote:
Originally Posted by smartcat
(Post 4204076)
GM's India exit could leave dealers bankrupt and over 7,000 jobless
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The job losses & bankruptcies would be tragic. GM should work with their dealer partners &
MG to migrate as many dealers as possible to the SAIC-owned company.
They can even be supplied with Chevy parts and asked to take care of existing GM customers. This would also allay fears of Chevrolet owners getting left in the lurch after GM's exit.
Quote:
Originally Posted by Czarcarsm
(Post 4203982)
I think you are doing some fear-mongering here.
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Quote:
Originally Posted by FrozeninTime
(Post 4203737)
I fear Ford will also annouce its exit suddenly like GM.
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I feel
FrozeninTime was responding to earlier posts by other members:
Quote:
Originally Posted by Krishnan83
(Post 4203637)
I just read a news item in NY Times that says Ford also might leave India.
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Quote:
Originally Posted by shortbread
(Post 4203683)
The manufacturers know this and will limit exposure as much as possible. The American 3 cannot exit the US market, but everything else will be on the table to be chopped!
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Reading those articles, it is quite possible to feel a little perturbed, isn't it?
And even though :OT widely , unless Ford address their marketing strategy pitfalls, this situation many deteriorate:
Quote:
Originally Posted by agambhandari
(Post 4203840)
Ford is doing good business right now.
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GM India echo its parent GM to the extent that GM were in the past a rudderless company many a time. In India, they were straddled with financial problems and had to sell sub- par Chinese models.
But Ford US are quite different from GM and their business strategy is more coherent, consistent and cohesive than any of their domestic competitors. And Ford India have had always good products, with no negative perception with the customers, and competitive in their respective segments.
It is their marketing and product planning department that always fail them: when almost every potential buyer wanted one, they couldn't supply enough EcoSports; when Toyota were selling the older Fortuner they miserably goofed up the new Endeavour variant availability, and now, when people are finally warming up to the Figo in its Sports variant they are not making available that variant in adequate numbers. Of course, people wait 6 months for a Brezza or 7 months for a Baleno, but that is because of the demand from the sheer number of sales outlets Maruti have. And the current Fortuner's success can at least in part be attributed to Ford's attitude towards potential Endeavour customers.
And, Ford India have a captive credit company (Ford Credit India Private Limited ) too, which is a subsidiary of Ford Motor Credit Company, Ford Motor Company’s global financing subsidiary though I do not know about its overall impact on company revenue.
Quote:
Originally Posted by shortbread
(Post 4203683)
Ford is no bank. It is a proper automotive company...
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That would also leave Ford India very little to "bank on" since they do not have a compensating profit stream.
So while we discuss GM's exit, the 'stark reality' is that similar situations are not impossible with other auto makers and like GM, they would have nobody to blame but themselves.
A good article with some internal emails -
link.
Also sharing an email received from GM as is:
Quote:
Hi,
Thank you for your participation in the press briefing last week with GM India President and Managing Director Kaher Kazem, and also for those who reached out for further information in the time that followed.
As we promised, we will keep you updated with progress on implementing our transition. A week on from our announcement, we wanted to let you know where we are up to, with a particular focus on our customers.
Below is the information we can share at this stage. You are able to attribute the below to Kaher Kazem, President and Managing Director GM India
As you know, GM India has committed to honoring all vehicle warranties and to providing service and parts to Chevrolet owners well beyond the warranty period. We are communicating directly with our customers through our call center, direct mail and social media channels.
From tomorrow, we will also communicate via print media outlets, so that if you are a Chevrolet customer you can have peace of mind that you and your vehicle will continue to be supported by Chevrolet.
GM India continues to provide service center support along with 24/7 contact center and roadside assistance for Chevrolet owners. GM India is committed to maintaining a service network across key locations in the country with staff trained to take care of all the needs of Chevrolet’s maintenance and repair.
Chevrolet customers can contact their nearest Chevrolet Service Centre or call Chevrolet’s Customer Assistance at 1-800-3000-8080, email us at gmi.cac@gm.com or visit www.chevrolet.co.in
We have this week begun discussions with our individual dealers about a transition plan that supports them and our customers. We greatly value the strong partnership we have had with our dealers over many years. We are all working to ensure we put our customers at the center of everything we do.
GM India is working directly with our dealers to transition to authorized service outlets and to recognize some of the investments made in dealerships.
We do consider the discussions with individual dealers to be confidential, given their commercial nature. But we will continue to share progress updates, as appropriate.
Thank you for all the support.
Best
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As this indeed sends a wrong message to other struggling manufactures in India, I think this also creates a dilemma in potential buyers of those companies IMO, a common man would surely think twice before considering a Fiat, Nissan or Ford. If Maruti is lucky enough that dilemma will reflect in their sales charts, just saying.
A rep from the authorised service centre in Noida suggested that they might move towards being a multi brand workshop or take the Chevrolet after-sales support to an existing multi brand workshop.
In my opinion, it makes the most sense for a workshop owner. As the numbers of Chevrolet customers coming in every day will be too low for them to sustain profitability.
As long as they honour my warranty, Chevrolet care package and provide original spares, I wouldn't have a problem going to a multi brand workshop.
The only worry would be, who is going to decide on the labour charges, the prices of spares? With GM not around, will the service centers have an autonomy on deciding on the rates?
:OT I think a separate thread needs to be created to discuss about companies bailing out of certain markets.
On the contrary, Fiat is here to stay for a good 3 years at minimum. They are more than happy to sell the 1.3 MJD's, they have huge order for the same. They are selling the Punto's & linea's just as a formality, not for profit.
Coming to the other companies, please refer to the following post in an another thread -
Link
Going by the figures, Ford should be the next to walk out. However, they had a habit of last minute recovery, that prolongs their stay for a few years further. Eg: Fiesta in 2006, Figo in 2010, Ecosport in 2012. All these products had prolonged their stay further just about when the sales were dwindling alarmingly. Lets hope they revive themselves.
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