[adimicra]

Originally Posted by Amartya

I quite enjoyed reading your post. There are things I don't agree with, but overall it made for a good read. Let's see if we can discuss along these lines and make this constructive. Let me start with the things or points that may be contrary to your opinion:

a. I believe that the market dictates the car. Look at the Honda City(OHC), it was the car that everyone aspired for , because they wanted a Honda (many generations of Accords and Civic imports made Honda a prestigious brand). It didn't matter that the City was actually a car sold in Thailand and among the cheapest that Honda made. The rest is history.
Now VW is no Honda - in terms of brand perception - but some clever marketing in the form of the German brand value has made it more aspirational. Indians do think that VW is a very premium brand - it's hilarious when one thinks about the meaning of the name itself - and that will play in it's favour. So, what they decided to do was to launch the Polo and the Vento, at entry prices low enough to attract any buyer looking at the competition, and once they were in the showroom, it was obvious that most went for a higher specced version. In order to be able to keep the entry prices low, they skimped on stuff to maintain margins.

Conclusion: Market dictates car. We want VW badge at a reasonable price, we get it, albeit reasonable in price only with low specced versions, because VW won't compromise on margins.

b. India is a relatively new on the automotive scene. The suppliers are still not consistently upto the standards that are demanded by firms like VW. Hence, localization happens at a slightly lazy rate. That means the more parts to import, the more the duty, the lesser the margins. Hence, skimp on features. Those who want them, pay through their noses and get them in Highline trim.

c. I would say, that engineering matters more than features. We after all do have the Polo and Vento built unto international standards as far as engineering is concerned. That I think is something to be appreciated.

Now the points where I agree with you:

a. VW's marketing is feeding on this superficial "snob" value. I find the colour restriction based on trim to be an extremely distasteful strategy. But as we all know, it'll work.

b. They are Skoda's parent company. In India, a Skoda can no longer be a "thinking man's" VW, anyone who thinks will have a hard time reconciling with the fact that Skoda's A.S.S. is the singularly worst in India. The Skoda's are such good cars, but .........
I think VW India should shoulder the blame squarely and try to make amends.

Great post Amartya and very balanced one too!
I appreciate VW for at least not compromising on basic engineering and quality which is evident in the Polo. The Polo trendline at 4.4L ex-showroom offers great quality which is not matched by any other car in that range ( though not rich in features) and that should be appreciated!
Since I just came back from the Honda showroom and had a look at the City once more, I am sorry to say that the interiors of the City does not look or feel upmarket at all - that touch of quality and premiumness is missing! Also, the City lacks basic features like a CD player or reading lights (no offense to city owners). I think most people buy the City mainly because of lack of alternatives. Now with the launch of the Vento, I see a significant impact to the City sales unless Honda adds more features (without increasing the price) and imparts better quality to the interiors.

[AirWind]

I'm hoping Skoda would respond with a competitively priced similar offering... going by Laura/Jetta, Fabia/Polo and Superb/Passat.

[Abhi_Automobile]

Now VW is no Honda - in terms of brand perception - but some clever marketing in the form of the German brand value has made it more aspirational.

I think that 'VW' is overall a more prestigious brand as compared to 'HONDA'. Globally for sure, maybe in India as well.Though I also think that neither of them qualify as 'premium' brand. Merc,Audi and BMW are true premium brands. I feel it very frustrating that every other guy has these days started their band and cars as 'premium'. There is nothing premium about most of the stuff that it tagged as premium. Period!

This is my completely unbiased opinion. I own neither brand's cars

VW = German
Honda = Japan

German cars are much more renounced than their Japanese counterparts. Japan was not very good at making cars until recently after the war. But German cars have always been admired for their grace and build. Be it a old school Beetle or the new age BMW M series.

[nowwhat?]

Originally Posted by ajai_dev

VW = German
Honda = Japan

German cars are much more renounced than their Japanese counterparts. Japan was not very good at making cars until recently after the war. But German cars have always been admired for their grace and build. Be it a old school Beetle or the new age BMW M series.

Buddy I think you meant to say "renowned".

renounced past participle, past tense of re·nounce (Verb)

1. Formally declare one's abandonment of (a claim, right, or possession).
2. Refuse to recognize or abide by any longer.

[nowwhat?]

Originally Posted by acidkill

Volkswagen plans Russian tyres for its vento?

Nizhnekamskshina Tyres OE on New Volkswagen India Model

Nizhnekamskshina, whatzizname?!

I for one, protest VW's string of pettyness for a 9-10 Lakh rupee car,

I see that volkswagen is indeed undercutting its premium image in several areas like the audio system, the power window switches, the locking mechanism and now the tyres...

Some info I got from the web.

• Nizhnekamskshina was set up in 1967.
• 1 in 3 Russian vehicles sport their tyres.
• Worldwide ranking 20/98.
• Supplies tyres for Chevy Niva.
• Tied up with Pirelli in the 80s. Passenger tyres built with Pirelli equipment.
• ISO 9001 certified by TUV.
• Pirelli, their long time partner. Why Pirelli? Because they are one of the founders of the tyre industry.

Under the contract with Pirelli the Italians had a goal not just to supply the equipment, and ensure the production of tires, but to provide the relevant world standards and requirements of the automakers.

Originally Posted by nowwhat?

Buddy I think you meant to say "renowned".

renounced past participle, past tense of re·nounce (Verb)

1. Formally declare one's abandonment of (a claim, right, or possession).
2. Refuse to recognize or abide by any longer.

Ya i did stupid automatic spell checker for chrome browser replaced the word.

[crackingride]

Originally Posted by Amartya

I quite enjoyed reading your post. There are things I don't agree with, but overall it made for a good read. Let's see if we can discuss along these lines and make this constructive. Let me start with the things or points that may be contrary to your opinion:

a. I believe that the market dictates the car. Look at the Honda City(OHC), it was the car that everyone aspired for , because they wanted a Honda (many generations of Accords and Civic imports made Honda a prestigious brand). It didn't matter that the City was actually a car sold in Thailand and among the cheapest that Honda made. The rest is history.
Now VW is no Honda - in terms of brand perception - but some clever marketing in the form of the German brand value has made it more aspirational. Indians do think that VW is a very premium brand - it's hilarious when one thinks about the meaning of the name itself - and that will play in it's favour. So, what they decided to do was to launch the Polo and the Vento, at entry prices low enough to attract any buyer looking at the competition, and once they were in the showroom, it was obvious that most went for a higher specced version. In order to be able to keep the entry prices low, they skimped on stuff to maintain margins.

Conclusion: Market dictates car. We want VW badge at a reasonable price, we get it, albeit reasonable in price only with low specced versions, because VW won't compromise on margins.

b. India is a relatively new on the automotive scene. The suppliers are still not consistently upto the standards that are demanded by firms like VW. Hence, localization happens at a slightly lazy rate. That means the more parts to import, the more the duty, the lesser the margins. Hence, skimp on features. Those who want them, pay through their noses and get them in Highline trim.

c. I would say, that engineering matters more than features. We after all do have the Polo and Vento built unto international standards as far as engineering is concerned. That I think is something to be appreciated.

Now the points where I agree with you:

a. VW's marketing is feeding on this superficial "snob" value. I find the colour restriction based on trim to be an extremely distasteful strategy. But as we all know, it'll work.

b. They are Skoda's parent company. In India, a Skoda can no longer be a "thinking man's" VW, anyone who thinks will have a hard time reconciling with the fact that Skoda's A.S.S. is the singularly worst in India. The Skoda's are such good cars, but .........
I think VW India should shoulder the blame squarely and try to make amends.

Amartya, I do not see any contrariness in your views!

But again, lets turn this debate around a bit. My point which became your last point b: Skoda being a thinking mans VW, etc., refutes your first point a; It was the car called the Octavia that drove the market, lest we forget.

We are happy with any badge at a reasonable price. I (and I'm sure many others) would be perfectly happy if all we ever got in this country was a Skoda as the pinnacle of German mid-level engineering, and where the balance between what you got (including intangibles such as customer experience) and what you paid was spot on. The last generation Laura in my opinion was almost such a car. Beat the Jetta in terms of spec, looked better, and was basically the same under the skirts.

If meeting price points and higher spec means a high level of very hi-tech localisation, I think the burden about getting quality, and capability, spot-on should be shared by us and the MNCs alike.

Its not that we do not have a component industry. Sundaram Clayton/ Lucas TVS/ Mico Bosch, and later Delphi/ Visteon have been around for years.

Its not that we cannot do quality. TVS Suzuki won the Deming prize for quality in 2002, and was the first two wheeler company in the world to get it. Prior to that, in 1998, Sundaram-Clayton ( also a group company) received the same. I was part of R&D at TVS Suzuki ( as an automobile designer) when this happened.

Parts from all of our ancilliary suppliers are happily making their way abroad for what was 20 percent of an estimated 20 billion USD turnover by way of exports (2008-09, according to the Auto Components Manufacturers Association themselves).

What we do not have are MNCs sharing critical know-how because they have to keep the high paying jobs for themselves in Bavaria and Wolfsburg. In another thread, I made a comment ( partly in jest) about why Ford has had such a low model output over the past 14 years here, and how the 8 upcoming Ford models will possibly be "sticker", "anniversary" and "sports" packs of 3 basic models. A similar argument was presented by way of rebuttal stating that volume-manufacturers need to do a lot of work to get pricing etc right, and that's why its easier for a MB or BMW to have a longer model line-up that changes almost every other year. If they engineer and build here, whats to stop them getting the volumes?

Why can't the car drive the market?

Software firms in Bangalore are doing engineering for Airbus and Boeing projects. I know, because I was in one of these too.
The upcoming 787 is a largely "outsourced" model; creative and overall responsibility lies with HQ.

As a designer, i see this in the consumer design domain too. Creative directors sit in London and Paris and San Diego, and dictate terms for products like Nokia phones sold here, with less experience than what comparable people sitting here have. The folks sitting here report back to HQ, and that's the way it is.

Everything else has been outsourced; if they ship out the high end bits too, they will all be unemployed.

But even then, given all we need for the purpose of this argument is higher tech localisation, why does my Macbook Pro says designed in California, assembled in China? What's allowing Malaysia and Thailand and Taiwan and Singapore and China to become high tech manufacturing hubs while we have bandhs and hartals and CWG scams?

It it laziness or a lack of capability? And on whose part?

On our part, the laziness arises because until there was any competition at all, you had to stand in line for a Bajaj Chetak, and no lala wanted to invest in R&D. Decades old Bajaj and Tata vehicles continue their poisonous legacy even today, and each directly descended from a technical and design standpoint from their ancestors in Vespa and Mercedes of the 40's and 50's!

How is it the Chinese and Koreans haven't had problems embracing high technology mass manufacture? VW has 11 (correct if wrong) or so operations in China! What's the issue here?

So, there seems to be a little of them not wanting us to do better, and us not wanting to do better, either!

To come back to the point, it seems to be more that marketing rather than the market is making the car. Fine, even Skoda was positioned as a premium brand. But then marketing should say this is all the market can bear, and leave it at that. And then just give us a car that can move the market. Think M800, think Esteem, think Octavia.

Give us decently specced Skoda's at Skoda prices if the market is actually determining the car. The number of reviews we have seen where the equivalent Skoda is beating the VW in a comparison are in-numerable.

Don't force Skoda to de-content just so that the half-baked VW can be priced higher and slotted in above it if the market has no real need for it.
That's exactly what's happening here. The market is not determining the car. It's the manufacturer which is doing it.

[noopster]

Interesting exchanges between the veterans, here's my $0.02.

In my opinion, Volkswagen has more badge value than Honda. The fact that it is German and has high-end cars like the Passat and Beetle in its stable, as opposed to the Japanese Honda, which growing up in India one always associated with 80km/litre 100cc bikes, may have contributed to this view. I don't think anyone here has formed their impressions of the VW brand based on their martking in India (if anything I found their "Das Auto" campaign pretentious and a little laughable). Of course I have no problem in people claiming that Honda beats VW in snob value- that's their opinion, and everyone's entitled to one.

Am a little puzzled at the vehemance with with some people are insisting that VW has overpriced its highline- in fact, "pay through their noses" is an extreme statement given that the highline AT (the model I am considering) has ABS, airbags, rear AC vents, great-looking interiors (IMO), excellent boot space, longer service window than the Honda and an overall build quality that makes most other cars look like tin cans. The only things that are missing vis-avis the ANHC are the USB/AUX ICE and paddle shifts, but like I said in a previous posts, those are toy-boy frills I can afford to live without, and I STILL end up paying significantly less than what I pay for the Honda.

As I type this, have virtually ruled out the City from my consideration set, though the dealer called yesterday and offered me a 15K discount for the AT. That still doesn't mean I will automatically buy the Vento: will do a thorough test drive before that!

[motorhead5]

Here is the Bangalore price list that I got from the dealer today.

Vehicle Models

Ex-showroom price

Insurance

Road Tax & Service Charge

Extended Warranty

On Road

Vento 1.6 L petrol Trend line

7,05,213

24,259

1,15,603

----

8,45,075

Vento 1.6 L Petrol High line

8,30,820

28,580

1,34,946

----

9,94,346

Vento 1.6 L Petrol High line A/T

9,29,691

31,981

1,50,172

----

11,11,845

Vento 1.6 L Diesel Trend line

8,06,102

27,730

1,31,140

----

9,64,972

Vento 1.6 L Diesel High line

9,31,709

32,051

1,50,483

----

11,14,243

NOTE : FOR TEMPORARY REGISTRATION EXTRA Rs. 1,000 /- Only

Rest of the document had only standard specs and Terms and Conditions.

[wilful]

Read GTO's superb review.
I am now tempted to sell my 4 (and a half) year old Honda CVT and go in for the Petrol AT. Spoke to the Cochin dealer y'day who gave an on road price of approx 10.45 lacs. Would of course want a TD - which will have to be in Sept.

(Wonder what a my HC will fetch today)

[naveen.raju]

Finally, got the confirmation from VW. Said they would deliver the car by the second week of Sept.
Already booked the number. KL-7 xx 3535 ;-)

[Amartya]

Originally Posted by crackingride

Amartya, I do not see any contrariness in your views!
- We are happy with any badge at a reasonable price.
- If meeting price points and higher spec means a high level of very hi-tech localisation, I think the burden about getting quality, and capability, spot-on should be shared by us and the MNCs alike.

- Why can't the car drive the market?

- But even then, given all we need for the purpose of this argument is higher tech localisation, why does my Macbook Pro says designed in California, assembled in China? There seems to be a little of them not wanting us to do better, and us not wanting to do better, either!

- To come back to the point, it seems to be more that marketing rather than the market is making the car.

- Don't force Skoda to de-content just so that the half-baked VW can be priced higher and slotted in above it if the market has no real need for it.
That's exactly what's happening here. The market is not determining the car. It's the manufacturer which is doing it.

Another lucid post, thanks, it was quite informative too. The more I read it, the more it seemed that you are right about us presenting arguments that lead to similar conclusions. I have taken the liberty to quote your post selectively - hope you don't mind - and shared my take on them below:

a. As an addendum to your point about us being happy with any badge at reasonable cost, it is important to add that this is true only if the brand is newly introduced in the market. For companies already present, this doesn't work, case in point, Fiat. You'd agree that the Octavia created a name for itself in the hitherto untapped segment, so in that case, yes the car drove the market (or rather had the first mover advantage).

b. In general, the car can drive the market only if it has something to offer that the market likes but the competitors do not provide. There are quite a few examples in the Indian automobile market, for example, the Sierra (later on the Safari), the Sumo, the i20, the Octavia etc. The Vento just cannot do that, and hence has to use the marketing trick of promoting their brand as the "aspirational" and quintessentially "German" offering. There is a fine line between what you are saying and I am trying to say, after all there is a reason why "marketing" has "market" as the root .

c. Sadly I do not see Skoda being more than a bits and pieces player in the market. It's a pity because they truly have better value-for-money offerings than the corresponding VWs. I agree with you completely. The truth is, the market will decide whether VW does well or not, but judging by the initial reactions (even on this forum), they've got it right.


@noopster

You are right, "paying through their noses" is indeed a strong statement (even extreme). Just to make my stance clearer on this, let me say that the original statement was made based on the variants of the Vento itself and not compared to the City. As you know, the difference in on-road price of the Trendline and Highline is a whopping 1.5L. This is such a stereotypical case of a company following the marketing guidebook of the $.99 sale. Lure people in with the base variant's pricing, then tell them they can't have the car in the colour of their choice and with the features they want. Feed them spiel about VW's Germanic qualities and they are hooked.
As far as the City is concerned, I'd be the first to agree that its overpriced, and that the Vento's pricing set the cat among the pigeons.
A quick correction, Honda's brand value in India is not based on the 100cc motorbikes (although now that too is a factor), it harks back to the times of license Raj, when the options available to Indian customers was limited to very few cars. Then, some people brought back their Accords and Corollas (humble cars in the west) - despite the high import duties - that were seen as being the cars to aspire for.

I've not test driven the Vento, so I'd reserve my judgment on it. Let us know what you think of it vis-a-vis the City.

[frankmehta]

Just a question, GTO. Is there a particular reason why you have excluded the Ford Fiesta 1.6 in the direct comparison between all the models in the same price range???

[srishiva]

Comparing Germans and Japanese without looking into the requirements would be futile. There is something one would call european in the design, build and feature list of cars built by european manufacturers. This is mostly due to the customer preferences.

In Japan, they concentrate more on efficiency with smaller sized engines. It also helps them that they have better roads compared to west. If you ask the Japs to build a car with european prices, wouldn't they be able to build something that compares to the european builds that we talk about?

People compare the Accord to sporty cars while the requirement they have is to match and beat Camry (very slightly) in the U.S market.

On the other hand, you cannot ignore the reliability that Japs can offer. VW is associated more with premium than Honda. So are its prices. It doesnt come cheap. But why is reliability sacrificed? Every car that Japs build are built to a requirement that the companies themselves decide on. If they are forced to build similar to others, they would because they could.