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Old 6th February 2021, 07:08   #1
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Default Strategies & tricks that automakers use to survive in India

India proudly sits up there in the list of biggest car markets of the world. But the Indian consumer also has big expectations from carmakers, and in almost every mass-market segment, there are multiple options for the consumer to choose from. We have seen success stories of car brands in India like Kia for example, and we have seen terrible failures of some brands too. Brands that don’t have any tricks up their sleeve fail terribly in this ever developing market. Therefore, brands have to put in a little extra effort to survive in India.

Let us discuss how brands survived in the Indian market.

#1: Getting better people to lead operations:

According to many, Rakesh Srivastava (Nissan) is one of the best industry experts and a genius. He has over 2 decades of experience in top two Indian car companies.

I for one was completely flummoxed when Nissan launched the Magnite at a starting price of just ₹ 4 99 000 for a compact SUV. A brilliant move by Nissan that saved it from the jaws of death!

Had Nissan not brought in Srivastava, this might not have been possible at all.

Moreover, Srivastava’s personal brand image is so strong that dealers celebrated when he was appointed! Even GTO has high regard for the man.

#2: Renaming:

Calling the Gravitas a Safari was a last minute decision. But with the #ReclaimYourLife slogan and Safari brand name, it has definitely managed to gain a lot of attention. A lot has been discussed about the name in the Gravitas/Safari thread, and whether this is a dilution of the Safari nameplate or truly another iconic Tata Motors SUV, I don’t know. But what I know for sure, is that the #ReclaimYourLife slogan and Safari name pulled the right strings of the Indian consumer’s hearts.

The Alturas G4 was supposed to be launched as a Ssyangong. But since the Ssangyong Rexton brand did not do well in India, they were forced to launch it as a Mahindra car, which is also an apt example here.

#3: Rebadging:

What takes the previous topic of ‘Renaming’ cars to survive in India a step further, is rebadging cars to survive in India. That’s exactly what Toyota has been doing for the past year or so. Most of Toyota’s sales come from Urban Cruiser and Glanza. It isn’t a hidden fact that Toyota isn’t excited for the Indian market and is just trying to stay relevant in the Indian Market.

#4: Overhyping stuff:

I don’t know if it’s the automotive media or the manufacturers themselves, but in both cases of the Tata Harrier and Mahindra Alturas, a lot of hype was spread about the LR platform of the Harrier, and the Mercedes-sourced gearbox of the Alturas.

A better example of brand hyping its heritage is MG. They totally tried to make unsuspecting Indian buyers believe that it is a British brand. Even now, they think pasting a British flag on the Gloster is gonna do them any favours.

#5: Portraying a brand more upmarket than it actually is.

NEXA works great for MSIL. They can sell the same cars in the Arena and NEXA chains, but gets customers thinking that the NEXA experience is more premium. I remember my school friend whose family, few years ago bought a Baleno; my friend went around correcting everyone that it’s a NEXA and not a Maruti!

A better example in this case would be VW. The maker of the ‘people’s car’ began its journey in India in 2007, with all the expensive cars — Passat, Jetta, then the high end Touareg SUV and the S class rivalling Phaeton.

GTO in the Phaeton Thread:

Quote:
The Phaeton is not here to sell, and VW very well knows that it won't. The sole purpose of the 75 lakh Phaeton is to raise the value of the VW brand in the market. Think about it, super cool Beetle, 75 lakh luxury car, 60 lakh Touareg......and last, a 5 lakh rupee hatch. "Wow, I want a VW".
This was precisely VW’s strategy.

#6: Lowering cost of cars:

ISUZU which sells the DMAX V Cross uses this tactic. Quoting blackwasp here —

Quote:
Originally Posted by blackwasp View Post
The standard accessories in the car are billed separately, so further lower the car's base price. Yes, as a buyer, you end up paying a total amount, but had they included the accessories' cost, you'd again end up paying higher tax and more on it.
It can be considered a trick to survive - for ISUZU won’t want its customers to be driven away by an exorbitant ex-showroom price for a lifestyle vehicle, or think twice if they had to be paying big money to a relatively unknown brand.

To me it seems like a pretty cool loophole to lower a car’s price.

#7: Branding exercises:

Whether it is MG and Volvo hiding their Chinese ownership by British and Swedish flags on/in their cars, or brilliant branding campaigns that worked wonders for carmakers, (Kia Seltos — Badass etc.) with a successful branding campaign, a manufacturer can get away with anything.

Brand ambassadors exist for the similar reasons. Do you think car manufacturers spend all that marketing money for nothing?

Even if it does not help in selling units, it definitely helps to introduce a brand or a car to the market.

Related Discussion - https://www.team-bhp.com/forum/india...ml#post1928062 (Celebrity Brand Ambassadors - Do they help sell cars?) (PS. the last poll option on the link is hilarious )

#8: Underequipping cars:

Under equipping is another way to lower the cost of a car.

Whether it is due to our tax structure or the carmaker’s greed for maximum profit, India-spec cars are generally under equipped, unsafe, shortened, powered by puny little engines etcetera.

This is the only way they can keep their prices low, because the Indian consumer wants value.

#9: Sticker Jobs and Special Editions:

It’s not like these add more value to anything, but some brands get their hands on a couple of stickers and black paint, the next thing you know they give you a ‘new car’.

This generally takes place during our festive season, when many people are looking to buy a whole new car and some of these just can’t resist that exclusivity which a special edition provides.

Thanks for reading!

Last edited by GTO : 8th February 2021 at 07:06. Reason: Let's not generalise all cars from any brand
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Old 6th February 2021, 07:28   #2
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Default Re: Strategies & tricks that automakers use to survive in India

Lets not forget companies cutting corners on the safety front to keep prices in check Instead we get chrome hilites and sticker jobs. Thank god it's beginning to change. People have a lot more choices now and the power of internet to do proper research
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Old 6th February 2021, 09:07   #3
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Default Re: Strategies & tricks that automakers use to survive in India

#10: Tyres
Almost all cars made here have taller side walls (read smaller rim) for the ride quality improvement. Blame the potholes and speed breakers, then to adjust the FE, they make it narrower.
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Old 6th February 2021, 09:17   #4
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You missed the biggest trick, which has been successful throughout all these years "Kitna deti hain". Maruti's advertisements were based on it for a long time, and the effects are still there among people. Even at this age, I hear comments "but it's Maruti which gives the most higher fuel efficiency". But the postive side of this is, most of the times they delivered what they advertised, even though a part of it is due to their cars being light.

I have two completely opposite experiences on the brilliant K12 engine. My brother's Swift with that engine is brilliant, at the same time the same engine in my FIL's Ritz is average in performance and fuel efficiency too. So barring some well built Maruti's (yes Ritz is well built and sturdy for a Maruti), their advertisements were to the point.
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Old 6th February 2021, 09:26   #5
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Default Re: Strategies & tricks that automakers use to survive in India

Great thread . Thanks for sharing! Two more from my side:

- Features! Am pleasantly surprised to even see mass market cars (e.g. Magnite) now coming with 360-degree cameras, wireless charging, ventilated seats (Sonet) and what not. In a market where all cars are the same size - due to sub 4 meter benefits - and powered by engines of the same capacity, design & features have become the foremost differentiators.

- Sadly, deletion of structural or important parts, which I call "invisible cost cutting" for India. The car owner will seldom know of these. The Duster's smaller airbags for India, Endeavour's missing chassis member, Seltos' unstable structure (international Seltos is stronger) etc. Best comeback is to hit manufacturers where it hurts them the most = bad publicity.
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Old 6th February 2021, 09:52   #6
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Default Re: Strategies & tricks that automakers use to survive in India

Hey mate , great idea.

Let me add one point :

Sub 4 meter "sedans" and " SUVs" :

Due to the ridiculous sub 4 meter tax rule , we have these weird butch hatches that are called "SUVs" and hatchbacks with a boot that are called "sedans". These fly off the shelves like hell. Honestly I would just buy a hatchback. But regular people fall for these .

Last edited by Eshan Joshi : 6th February 2021 at 10:05.
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Old 6th February 2021, 10:02   #7
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These are just few of a wide range of examples. Whether the product lives up to its name or not, its tagline most certainly does create quite a buzz and targets the sentiments of people!
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Old 6th February 2021, 10:55   #8
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Default Re: Strategies & tricks that automakers use to survive in India

Pretty sure that most of these are not exclusive to India alone. Forget car makers, forget India even, there is no business in the present world that runs without strategies (or tricks) from Day 1. Out of these, some are considered ethical and others not so much. Some are considered smart and others deceptive. Now that could make for a more interesting discussion rather than listing down every common interventional strategy in the auto market.

How about Mahindra ripping off Jeep's design for their new Thar? A deceptive, non-ethical trick or a clever marketing strategy?
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Old 6th February 2021, 11:54   #9
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Default Re: Strategies & tricks that automakers use to survive in India

Creating or maintaining hype

Remember when Kia was about to enter the market, we saw news of various expensive global products like Stringer GT, Sorento, Optima being evaluated for Indian market. At that time I honestly thought that Kia considered them but rejected afterwards. But then there came the news of Pallisade being evaluated for market, Toyota evaluating Hilux for sub 20 lakh offering, Jeep about Renegade, Suzuki about Swift sport and 3 door Jimny and a lot more like these. Over the time I have realised that these announcements are only to generate hype. If a model appears too good for the present Indian market, it most probably is.

The only evaluating that I consider true is the Honda HRV because that's Honda's last hope.

Also manufacturers have started revealing more of their future plans and give minor updates or facelifts almost every year or two.

Last edited by YD14 : 6th February 2021 at 11:58.
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Old 6th February 2021, 12:05   #10
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# Misleading consumers with non-nonsensical campaigns

Classic case in point being absence of Diesel engines in post BS6 era in Maruti's Stable, and their whole spin around it

'https://www.team-bhp.com/forum/indian-car-scene/223209-maruti-now-says-diesel-car-costs-can-only-recovered-after-260-000-km.html'
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Old 6th February 2021, 12:15   #11
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Few strategies that helps automakers tremendously in cost-cutting but gets my goat:

1. Diluting quality as compared to the global variants
2. Having a different recall strategy for India vs other countries. Indian customers are treated as tier-2 citizens when it comes to addressing concerns around malfunctioning parts

Last edited by warrioraks : 6th February 2021 at 12:36.
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Old 6th February 2021, 13:03   #12
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Quote:
#9: Sticker Jobs and Special Editions:

Itís not like these add more value to anything, but some brands get their hands on a couple of stickers and black paint, the next thing you know they give you a Ďnew carí.

This generally takes place during our festive season, when many people are looking to buy a whole new car and some of these just canít resist that exclusivity which a special edition provides.
Indian automobile makers have mastered this cost effective strategy to prolong the shelf life of their obsolete models.

Case in Point:

1) Maruti: with their annual limited editions
2) Mahindra: Sports edition of XUV 500
3) Evergreening of Splendor: Splendor, Splendor +, Splendor Pro, i-Smart

By foreign brands

4) Duster Adventure edition
5) Creta Anniversary edition
6) Honda City 10th anniversary edition

Though we had some honest attempts at special editions too:

1) Eco Sport - Platinum Edition
2) Liva TRD edition
3) Jeep Bedrock edition
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Old 6th February 2021, 14:46   #13
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Originally Posted by EightSix View Post
But what I know for sure, is that the #ReclaimYourLife slogan and Safari name pulled the right strings of the Indian consumerís hearts.
It's interesting how the Safari has already been labelled a success before even the prices have been revealed!

Quote:
A better example of brand hyping its heritage is MG. They totally tried to make unsuspecting Indian buyers believe that it is a British brand. Even now, they think pasting a British flag on the Gloster is gonna do them any favours.
Quote:

Whether it is MG and Volvo hiding their Chinese ownership by British and Swedish flags on/in their cars, or brilliant branding campaigns that worked wonders for carmakers, (Kia Seltos ó Badass etc.) with a successful branding campaign, a manufacturer can get away with anything.
Imo they aren't really doing anything wrong because they own the badge now. They can do whatever the want with it. And as far as hiding "Chinese" ownership is concerned, be aware that if you're criticizing the Chinese for this crime, Mini being marketed as British and not German, JLR marketed as British and not indian, Rolls Royce being marketed as English and not German are all in the same boat. So why discriminate on the basis of country of origin? When these corporate buy other brands, they also buy the goodwill associated with the tag
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Old 6th February 2021, 18:52   #14
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I have been reading about scrapping of older automobiles since decades. The MNC car makers have tried and tried to influence compulsory car scrapping policies in Western democracies since decades. But the transparency at the government level vis a vis their decisions that affect the well being of the general public is worth emulating. Hence, these MNC car makers called it quits after several efforts to get such policies made there.

The experts had warned that after such failures in the West, these MNC's are headed for the banana republics and developing countries where the automobile sales matter for them. They were very successful in China. And joined by our auto makers, they are now partly successful in India. The upcoming private vehicle scrappage policy though voluntary, could have some draconian Green Tax and Fitness Test fee irritants that make many owners give up their ownership.

https://www.team-bhp.com/forum/india...-2022-a-4.html (Scrappage policy approved, to come into effect from April 2022)

And what an IDEA that is to boost sales and survive !!
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Old 6th February 2021, 21:32   #15
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Originally Posted by anjan_c2007 View Post
I have been reading about scrapping of older automobiles since decades. The MNC car makers have tried and tried to influence compulsory car scrapping policies in Western democracies since decades.

And what an IDEA that is to boost sales and survive !!
In country like India, this strategy will be like walking on two edged sword. Middle class people think thrice before purchasing car if scrappage policy comes into force strictly.
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