Team-BHP > BHP India > The Indian Car Scene


View Poll Results: What's your car buying strategy with respect to brands?
I shortlist established brands and then compare models 33 23.91%
I shortlist models irrespective of new or established brand 42 30.43%
I give some weightage to brand but it is not a be-all and end-all. 63 45.65%
Voters: 138. You may not vote on this poll

Reply
 
Thread Tools Search this Thread
Old 8th September 2019, 19:17   #1
BHPian
 
FrodoOfTheShire's Avatar
 
Join Date: Jan 2018
Location: Bhubaneswar
Posts: 433
Thanked: 1,185 Times
Default Established brands vs new entrants - Car purchase decisions of Indian buyers

In India, most of the potential car buyers either go for Maruti Suzuki or Hyundai. These two companies have firmly entrenched themselves in the Indian car market with their VFM products, having all the latest gizmos that buyers crave, massive sales and service network, strong after sales support/customer service, easy availability of spare parts, FNG friendly vehicles, easy maintenance and finally great resale value. Most of their cars may not be a hardcore enthusiast's choice with respect to driving dynamics and safety but non-enthusiasts love them for the sheer value and practicality they offer! Having created this immense trust in buyers' minds, these two companies' cars are mostly recommended by family, relatives, friends and colleagues and are seen as safe, no-nonsense choices having great social acceptance.

Other car manufacturers like Ford, Mahindra, Tata, Renault/Nissan and VW/Skoda have been in the Indian market from a long time but haven't been able to capture Indian car buyers' fancies mostly due to opposite of the reasons mentioned above. Add to this, the questionable social acceptance from people in the immediate environment and the need to always defend the purchase decisions infront of skeptics. Having bought the Ford EcoSport, I've had my fair share of "well wishers" who had called me and asked me to cancel the booking, since they had heard that Ford cars are "not reliable" and "costly to maintain".

This brings me to the latest fascination of Indian car buyers with KIA and MG. Both the Hector and the Seltos have had tremendous response from the Indian market where people are usually apprehensive of anything new/unknown. The Hector is off to a good start after seeing tremendous booking response and the Seltos has even managed to dethrone the long reigning champion Hyundai Creta!

Now, it's still debatable as to how many people know that MG is not really a British company anymore and actually belongs to Chinese SAIC. Also debatable how many people know about the KIA-Hyundai association. Granted that all it takes is a simple Google search but still, SAIC has clevely managed to market MG as the old British company, distancing itself from the Chinese stigma. Meanwhile KIA has never mentioned its ties to Hyundai inorder to stand apart on its own as a separate entity albeit losing the instant trust that would've come with the Hyundai association.

The fact of the matter is still that both these companies are unknown entities in India with regards to their respective products (Hector and Seltos), their after sales support, ease/difficulty of maintenance and their resale values.

So my question is, has the new age Indian car buyer finally come out of the age old car buying practices? Does the brand establishment, safe choice, faith/trust, maintenance and resale value no longer matter?

Note to Mods: Bits and pieces of this discussion are scattered across the Seltos and Hector thread and elsewhere, but wanted to have a common discussion thread. Please remove this thread or merge as appropriate.
FrodoOfTheShire is offline   (16) Thanks Reply With Quote
Old 8th September 2019, 20:28   #2
Distinguished - BHPian
 
Samba's Avatar
 
Join Date: Apr 2013
Location: Kolkata
Posts: 1,305
Thanked: 9,678 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

When a new company enters our country, the first car they launch matters a lot. The first impression matters.

Here Hector and Seltos both looks to be competitive products with great looks, topnotch interior, filled with gizmos.
If we look outside TeamBhp, the above points are more than enough to appeal to the masses.

The current generation buyers do look beyond Maruti/Hyundai. Gone are the days when there was limited access to internet. We do accept changes for a better tomorrow!

Now regarding survival of a product-

I am optimistic about KIA. I have seen there range of cars in the 2018 auto expo and it was more than impressive. It looks like KIA is here to stay.
But i do not feel the same for MG. Am not sure, what will be their next launches.

A company cant survive on just one car. A single car can drag a company for few years. But once that product is at the end of its life cycle, the company will be in trouble.

Maruti and Hyundai rule the market just because, both of them have a brilliant lineup of cars. Fix your budget and you have more than one option to chose from. Most of the other companies simply lack it.

In 90's Indian cricket team was dependent on Sachin Tendulkar, he hit a century, India had a fair chance to win, the day Sachin used to flop, India was in trouble. But post 2000, the team had a great lineup and it was no longer a team only depending on Sachin Tendulkar! Similarly with just one good product it's tough for a company to survive for a long time.

The hit formula in India includes the following-

Enter with a good product.
Increase the lineup & have cars in all segments.
Competitive pricing
Good resale value
Must be fuel efficient!

Maruti & Hyundai ticks all the above options, while Toyota, Honda & Tata are following their footsteps slowly!

Hope companies like MG, FCA, Nissan, Renault, VW, Skoda do have some future proof plans!

Last edited by Samba : 8th September 2019 at 20:39.
Samba is offline   (13) Thanks Reply With Quote
Old 8th September 2019, 20:41   #3
Team-BHP Support
 
CrAzY dRiVeR's Avatar
 
Join Date: Jun 2006
Location: India
Posts: 12,175
Thanked: 32,284 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Indians do welcome new brands, even homegrown ones. We've seen this time and over again - almost every other new brand with a good product was given a very warm welcome.

Quote:
Ford, Mahindra, Tata, Renault/Nissan and VW/Skoda
All of these brands had a good start. Didn't they? Ford with the Escort and Ikon, Mahindra with Scorpio, TATA with Indica, Renault with the Duster, Nissan with Sunny, Skoda with the original Octavia, VW with Polo! Even FIAT with Uno/ Palio, Jeep with the Compass, etc were all well received in the market. We associate FIAT as the perennial underdog of the market - but forget that it's the same brand that had the biggest welcome into the market - the record bookings gathered by Uno prior to launch has never been witnessed ever after.

The problem, however, is that in the Indian market - you are always guilty once you are convicted. Like a person who committed a crime is never again accepted back into society - a brand that has lost its trust will have to prove itself over the years until the mass market trusts it again. And all these brands mentioned above just failed to capitalize on their start!

Launching a half-baked, or unreliable, or a product with a poor ownership experience is the worst mistake probably that any brand could do in the market. Word spreads fast, and prejudice develops against the brand - one that will stay far longer in the mindset than the original product itself. Any small mistakes committed henceforth will be associated with the past and added up to the 'I told you so' list. Human behaviour.

Even Hyundai was a total newcomer not so long ago. They built the current market positioning with the Santro and Accent - and didn't have to look back afterwards. A new brand has it relatively easy in the Indian market - however, bigger the success, even bigger the risks. Kia looks sorted to follow the Hyundai path, although MG has to act very fast to arrest the fears and questions arising regarding the reliability of their offerings.
CrAzY dRiVeR is offline   (26) Thanks Reply With Quote
Old 8th September 2019, 20:59   #4
Senior - BHPian
 
dark.knight's Avatar
 
Join Date: Apr 2013
Location: Beans Town
Posts: 1,471
Thanked: 4,588 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

In my opinion, a company, anywhere across the globe must do what is expected of them, to succeed, they are :

- Pricing the product not only according to its worth, but also within reasonable range of its competition, as a product that is very high priced but worth it, will crash if the competition has better pricing.

- Fantastic post-purchase service facilities, even IF a premium should be charged for the same. A car without proper service network is doomed to fall. Famous examples of failure are Nissan, Fiat, Skoda and VW. Some may have picked up over time but too late, first impressions count.

- Generous warranty terms, the more the better.

- Some marketing pizzaz. YES, its important. Most buyers want to know that what they buy is well publicized, catchy and well endorsed. The foundations of reputation and quality are laid by marketing first, and production next. Who doesn't know Freude Am Fahren/ Joy in Driving (BMW), or Power to Surprise (KIA), they make their values known.

- Good design, practical interiors and reliable electronics.

Give me a brand with all the above 5 attributes and that'll be enough to disrupt all the existing players within years, if not topple the leaders. Hyundai and KIA did just that globally and despite the hate, despite their newness in the game and despite all odds, they round out the top 5 automakers today, with only groups that have way more sub-brands in their arsenal like VWAG, Toyota, Nissan-Renault-Mitsubishi-~ Group and GM, ahead.
dark.knight is offline   (7) Thanks Reply With Quote
Old 8th September 2019, 21:05   #5
Distinguished - BHPian
 
Rajeevraj's Avatar
 
Join Date: Aug 2011
Location: Bangalore
Posts: 3,729
Thanked: 10,688 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Well said by CD above. A lot of the new brands had a great start in India. Some like the Renualt tasted volume success with a later launch (Kwid in the case of Renault)- this was purely on the strength of the product.

The challenge is to sustain.

For that you need to build up your product line and not be a one trick pony.
  • You need to ramp up your sales and service network to reach out to every nook and corner of this vast country.
  • You need to listen to the customer and refine your product line to quickly respond to and fix issues and make sure they do not happen again.
  • You need to treat your customers well and not let arrogance creep in just because you have an initial bunch of bookings.
  • Finally, most importantly, as a summary of all points above, you can have the fanciest product in the world with all the latest and greatest-but you need to reach to the point where the customer thinks-'I buy this, I will have peace of mind and a fuss free ownership'.

Today only Maruti and to a great extent, Hyundai, have cracked that magic code. Kia and MG have started well, but remains to be seen how the sustain part works out.

To answer the core question

Quote:
So my question is, has the new age Indian car buyer finally come out of the age old car buying practices? Does the brand establishment, safe choice, faith/trust, maintenance and resale value no longer matter?
Absolutely not. All the above very much matters (and it should), customers are always open to a new good product. But can the company continue to sustain that interest and convert it into a long term trust is the question.
Rajeevraj is offline   (8) Thanks Reply With Quote
Old 8th September 2019, 22:03   #6
BANNED
 
Join Date: Sep 2019
Location: Bathinda
Posts: 27
Thanked: 18 Times
Infractions: 0/2 (8)
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

We Indians are always open to new products and brands provided they are perceived as value for money along with new features they bring along. This is seen in varied things from smart phones to televisions ...new entrants with good price tag along with something new is leached upon . But sadly cars are not features alone...they are much more ...having soul and certain character which is unique to each brand . In the long run only those survive which bring true satisfaction to the owners giving reliability along with driving enjoyment plus most important thing.... bang for your bucks.
Sandeep500 is offline   Reply With Quote
Old 8th September 2019, 22:42   #7
BHPian
 
Nazaar25's Avatar
 
Join Date: Sep 2019
Location: Mumbai
Posts: 37
Thanked: 40 Times
Infractions: 0/1 (4)
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Can't agree more with all the BHPians above!
The Indian car buyers have given a chance to every manufacturer and it is the manufacturers who made mistakes which resulted in their downfall.

And when it comes to buying a car, people are bound to play it safe as it's a big investment. Everybody wants a reliable car and a trouble-free ownership experience and that's why brands like MS and Hyundai are on the top.
MG and Kia have just started their innings and it is yet to be seen whether they can survive in such a cost-sensitive and demanding market like India.
Nazaar25 is offline   (1) Thanks Reply With Quote
Old 10th September 2019, 11:52   #8
BHPian
 
Join Date: Jul 2019
Location: Bangalore
Posts: 62
Thanked: 94 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Quote:
Originally Posted by Nazaar25 View Post
And when it comes to buying a car, people are bound to play it safe as it's a big investment. Everybody wants a reliable car and a trouble-free ownership experience and that's why brands like MS and Hyundai are on the top.
MG and Kia have just started their innings and it is yet to be seen whether they can survive in such a cost-sensitive and demanding market like India.
Your sentences contradict each other here. On one hand people want to play it safe with a huge investment and hence go for the reputed brands. On the other hand, people are willing to risk the investment with brands they know nothing about? That doesn't sound safe to me at all.
nikhilthegunner is online now   (1) Thanks Reply With Quote
Old 10th September 2019, 11:53   #9
BHPian
 
King_pin09's Avatar
 
Join Date: Jan 2016
Location: Mumbai
Posts: 374
Thanked: 530 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Well, I differ in my opinion as I firmly believe that an Indian buyer (or to that extent the Indian Automotive market as a whole) has evolved substantially from the lazy days of Ambassadors and Heralds. A brief search over the recent past would reveal that an Indian buyer has always welcomed new entrants whenever he finds the product as justified. One may recall the 118NE, Cielo, Peugeot 309, Opel Astra, Mitsubishi Lancer, Skoda Octavia, Fiat Uno, Hyundai Accent, and several other cars that were introduced by new entrants or the cars such as Sumo, Armada, Tempo Trax, etc., which came from houses that were yet in nascent stages of car manufacturing. Albeit all these cars were good for their times and had a glorious beginning, but the real custard came out when it was time to provide the service back up and prove reliability. Not many except few (say Hyundai , etc) were really geared up to adequately ‘Follow through’ once the sale took place.

Those who got their homework done were rewarded (Say Hyundai) while others were either rejected by the market or that they got engulfed in their own internal disputes leading to downfall (Daewoo may still remain an exception though). Most of them faded from the market (and from the preferences of the customer) once their one trick pony lost its streak.

Coming to this day and looking at MG and KIA, albeit they are off to a commendable start, it is all up to how their products really fare in the long run and how the manufacturer backs up their products after the sales point, which decides their future. I sincerely hope that MG and KIA have done their home works right and are adequately geared to meet the after sales demands satisfactorily so that they do not face the same fate as several others have met in our market.
King_pin09 is online now   (1) Thanks Reply With Quote
Old 10th September 2019, 12:18   #10
Senior - BHPian
 
Sebring's Avatar
 
Join Date: Apr 2011
Location: Dubai/Bengaluru
Posts: 1,054
Thanked: 2,167 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

It's the triumph of the product segment they have chosen to enter. Imagine if Kia debuted a hatch and MG debuted a sedan, would they have takers? Points to good research and having their 'ears to the ground'. City roads are a mess and comfort is order of the day, so a SUV has a good fighting chance. Also the products are pretty well endowed with features, leaving nothing out. Service is yet to be tested, so that's a discussion for another day. I feel that the market is ripe for a Kona like car (gauging by the crowds at Hyundai dealerships), but with half the asking price. Car makers please note!
Sebring is offline   (2) Thanks Reply With Quote
Old 10th September 2019, 12:21   #11
Senior - BHPian
 
Reinhard's Avatar
 
Join Date: Nov 2010
Location: Pune
Posts: 1,692
Thanked: 2,654 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Hmm interesting thread! Will be a nice read to check individual opinions, all of which are right. Perhaps we should have a poll at the top of this thread? That will give a very quick glance at inclinations of fellow bhpians on the matter?
P.S. - I have reported to the mods to check and add a poll if suitable.

Last edited by Reinhard : 10th September 2019 at 12:27.
Reinhard is offline   (3) Thanks Reply With Quote
Old 10th September 2019, 12:44   #12
Tgo
BHPian
 
Tgo's Avatar
 
Join Date: Apr 2011
Location: Pata(l)-Jaipur
Posts: 517
Thanked: 700 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

I would give you my perspective on new entrants. One common factor is that first customers of any brand are treated nicely since they are instrumental in making or braking a brands value.

In case of the Hector, it is the sensible pricing, up to date product and a 5 year unlimited km warranty which draws me towards it.

For the Seltos, it is the same thing along with their relationship with Hyundai which makes one believe that they will offer a similar or better ownership experience.

Older brands which are launching new products have their good and bad associated with them. Their pricing and offerings are also foolishly spec-ed since they have to save the interest of other cars in their line-up. They are usually just filling in the gap in the line-up rather than changing their line-up. This gives one too many choices.

I once read a random fact which said that even though ice cream companies have hundreds of flavours, Chocolate, Vanilla and Strawberry are the highest grossing flavours.

Having a one car line-up at the launch makes for a greater bang for the buck.
Tgo is offline   (1) Thanks Reply With Quote
Old 10th September 2019, 13:44   #13
BHPian
 
Join Date: Jun 2019
Location: Pune
Posts: 61
Thanked: 80 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Agree with what most people have written here. Indian buyer is not averse to new brands.
But at the same time people are mature and cleaver when it comes to spending their money on a car. We look for "value for money" and not "cheap" car. A lesson some brands learned the hard way. (Datsun, Chevrolet etc). Also, when it comes to committing to a market, I believe when it comes to India either you go all out or do not enter the market at all. People wont buy your car if you do not expand the service network enough, specially if you are looking to sell small cars and in numbers, because even today most of India lives in a rural or semi rural areas. (example - Nissan).

So many such examples where commitment to market has led to success or failure and had nothing to do with peoples acceptance of a new brand.

KTM and UM motors.
Renault and Nissan/ Datsun

Many more such examples in the last 2 decades.
ishan12 is offline   Reply With Quote
Old 10th September 2019, 15:34   #14
Distinguished - BHPian
 
Rajeevraj's Avatar
 
Join Date: Aug 2011
Location: Bangalore
Posts: 3,729
Thanked: 10,688 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

Quote:
Originally Posted by FrodoOfTheShire View Post
So my question is, has the new age Indian car buyer finally come out of the age old car buying practices? Does the brand establishment, safe choice, faith/trust, maintenance and resale value no longer matter?
Quote:
Originally Posted by Rajeevraj View Post

Absolutely not. All the above very much matters (and it should), customers are always open to a new good product. But can the company continue to sustain that interest and convert it into a long term trust is the question.
Another point which actually contradicts my earlier response. For a new age car buyer who is buying something like the Hector or Kia (Which are in the 15-20L range which is by no means cheap) most likely it would be a 2nd or 3rd car. By then a customer would have had enough experience to take some risks with a purchase in this price bracket. So yes, the higher one goes in the price bracket, the chances for a buyer to think beyond the typical Indian criteria is higher than one would see in the entry level segments.
Rajeevraj is offline   (1) Thanks Reply With Quote
Old 10th September 2019, 19:37   #15
Newbie
 
lrsays's Avatar
 
Join Date: Aug 2019
Location: BANGALROE
Posts: 15
Thanked: 6 Times
Default Re: Established brands vs new entrants - Car purchase decisions of Indian buyers

I think resale value for new brands is hard to predict, so this may not be a big factor here.
Initially these new brands might struggle but in longer run following things will decide future of new brands-
1. ASS.
2. Facelift, that shows of level of commitment for Indian market.
3. Availability of spare parts, specially outside metro cities.

Most of the new age buyers have access to internet which means features, competitive pricing, extended support/AMC and credibility in international market will play a major role here.
lrsays is online now   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Connected car platforms: Do they influence your car purchase decisions? CrAzY dRiVeR The Indian Car Scene 42 3rd July 2019 17:13
Live in a smaller city / town? Always buy your car from a large + established brand GTO Indian Car Dealerships 25 7th March 2019 16:12
Big Shot Motors - New entrants into Indian ATV Segment traveloholic Motorbikes 14 10th March 2014 22:43
Decisions... Decisions on choosing a four wheeled friend balashome The Indian Car Scene 47 1st October 2005 20:32


All times are GMT +5.5. The time now is 13:53.

Copyright 2000 - 2019, Team-BHP.com
Proudly powered by E2E Networks