Strategies & tricks that automakers use to survive in India

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.

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India proudly sits up there in the list of the 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 SsangYong. 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 many 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:

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:

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 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 - (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!

Thanks to EightSix once again! Check out BHPian comments for more insights & information.

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