[Stribog]

In the early 70's when the Japanese imports started flooding into America, the image of Japanese cars, including the likes of Toyota and Honda was that they were cheap Asian cars, shoddily built but low cost to run and frugal in mileage.This was the time of the oil crisis triggered by OPEC rigging prices and causing fuel prices to quadruple (yes, quadruple) in a span of a year. Imagine diesel retailing at Rs 280 / litre in India overnight.

Even by the early 80's though, these companies were breaking this 'image trap' and were recognised for making well engineered, robust and still frugal vehicles.

From a measly 2000-3000 units exported into the USA in the 50's to 10,000 by the 60's to a whopping 1.9 Million units in 1980. This threatened the US domestic players so much that they lobbied their govt and got embargos, duties and import quotas imposed upon Japanese car makers. Some numbers from 1980.

Toyota 582,000

Nissan 517,000

Honda 375,000

Toyo Kogyo 162,000

Mitsubishi Motors 125,000

Fuji Heavy Industries 143,000

Isuzu 3,300

Today, indeed even by the 90's with the success of Marquee brands like Infinity and Lexus, Japanese automakers control some 40% of the US market, and world over are known for a wide spread of qualities - reliable, ranges spanning from cheap / entry level to ultra luxury are but a few.

In India it appears as though the market has slotted auto manufacturers neatly into categories and this has stayed true for a couple of decades now.

Note, this description is from the perspective of the mass automarket and the general buyer and not the enthusiast in this forum.

Maruti - Highly reliable, robust, well engineered products, cost effective but not for splurging on larger or expensive cars.

Tata - Cheap commercial truck manufacturer who segwayed into cars, makes value for money cars, associated with cabs

Mahindra - Arguably the only Indian automaker to break out of the image trap, went from a pure commercial, truck builder to cars and has successfully been able to market and sell even cars cross 25 big ones.


Hyundai - the Maruti for the urban middle class, typically more aspirational as a brand than Maruti or Tata but the line is drawn when it comes to luxury categories.

VW / Skoda - Costly / expensive to maintain, poor service, not very stylish (less bling, chrome) - I think these brands are seen by the market between Hyundai and the Big Germans.

Renault don't have the kind of mass market presence that there are stereotypes about it. The likes of Nissan, Izusu, Force (for cars) are so small in presence that I don't think anyone outside of enthusiasts even have any image of them, they simply don't exist as far as the mass market goes.

This holds even for 2 wheelers,

Hero Honda is the Maruti of two wheelers, cheap, reliable people carriers, not given to fancy.

Bajaj would be the Hyundai of two wheelers, aspirational as opposed to Honda which is the mass mover, but with a hard price cap beyond which it is not seen as VFM.


Now this plays out in the sales figures very clearly.

As we all very well know, Maruti does exceedingly well, utterly dominates in the 3-10L market, its numbers drop in the 10-12L segment and the few times they have ventured in the higher category segments, including the brilliant Kizashi (spelling?) have failed miserably. Hyundai? do well in the 5-10L segment and utterly dominate the 10-15L segment (Creta, fluidic Verna, i20 etc). VW / Skoda try all they might to muscle in the C segment sedan have failed miserably in generating volumes comparable to their rivals, it is their Octy, Superb band that draws in the moolah for them.

Definitely on some level some brands recognise these traps, which is why we have Nexa, though IMO (personal opinion and not what I believe the market perceives) they have muddled this also with offerings across price ranges even in Nexa.

Some (again IMO) are swimming against the tide with a 100 kg rock tied to their legs - Tata would be the classic case here, their image goes against even well made (relative to previous Tata offerings in general) and stunning looking products like the Harrier. Though I would say that with the success of the Nexon, and a complete revamp in design language (previously every car looked like an Indica ), the market image is slowly shifting.

The question now is, should these automakers be content to stay where they are? Or like the Japanese automakers, spin off completely separate marquee entities (or lower level brands in the case of automakers like VW / Skoda), create new products around the value proposition they want to target ?

Hector is a brilliant test case that worked...and then some more. Chinese products in general have the image trap of being shoddily made, cheap copies (even this forum has this image as seen in the Hector fire threads). If SAIC had launched the Hector under their banner, I sincerely doubt Indians would have purchased it any decent quantity as plonking some 16-20 big ones for a Chinese product would require overcoming some serious mental barriers. SAIC piggy backed on a marquee brand, MG, harped its British heritage, had Sherlock run the ads for them and we have a brand that has already hit numbers the likes of Tata only dream of for their Harrier / Hexa lines.

Thoughts?

[ndp88]

Good thread. Brought back memories of management school days, when we used to endlessly debate the Auto brands and their strategies since Ford Model-T.

I remember conversation with my colleague recently when Harrier was launched. Looking at the giant hoarding of Harrier, he said - "If only that car's bonnet had some other logo, I would have rushed to the showroom". People don't want to spend money on brands that they can't relate with luxury. To think of it, its true. Its difficult to relate 'Tata' with luxury or with automotive marvel. Sure, they have hospitality ventures & cutting-edge defense companies. But given a choice between Toyota & Tata ? We know the answer.

It is not a easy feat, and sure not a fast one either. Be it Tata or Mahindra, they have started to get their act together only very recently in consumer automobiles. It will take more time before their car brand finds some positioning. Even though Tata had great success with Indica & Mahindra with Scorpio decade ago, consistency was missing. Now there is steady stream of product rollouts with finesse to impress particular consumer segments.

Suzuki is too busy counting money to be bothered about luxury segment right now. Maybe they did comprehensive study & found out that Indian market is yet to mature for appetite beyond 'kitna deti hai?.

Bajaj did phenomenal work to break out of its image, and convince Indians to spend more on its products. Its truly impressive, maybe Car manufacturers can learn few things there.

Also not just in India, but overall global automobile market is at crossroads. Many companies are struggling to find direction. Maybe Indian car manufacturers should rent the firangi brand by means of some partnership, slap that aspirational logo on decent home-made products ? Mahindra is trying something similar with Ford I suspect.

It would be fair to give the Indian companies 5-7 years more before writing them off. Between BS6, EV transition, urban/highway infrastructure improvement, consumer wealth, inflation; we should know the names of winning brands by end of next decade.

[GTO]

A somewhat related thread - Your perceptions of car brands (Perception, Price and Looks : The factors that sell a car).

IMHO, except for Maruti, Hyundai & Mercedes who command sales on the basis of brand alone, the market is now "product" driven rather than being "brand" driven. Example = no one buys a "Honda" blindly anymore. Look at the Hector & Seltos. Both cars from unknown brands, but still did well. Consider the XUV500, where the product was punching far higher than the brand could ever aspire for. Then, there is Tata which has successful new products (Tiago, Nexon) as well as failures (Harrier).

The popularity of the Triber (and before that, Kwid) further prove this point.