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Why USA car makers are unable to sustain & survive in India

Why do you think these brands are unable to sustain and survive in India?

BHPian Livnletcarsliv recently shared this with other enthusiasts.

FCA, Chevy, Ford, Harley, Indian, etc. Why do you think these brands are unable to sustain and survive in India?

1. Chevy, FCA, Harley - Closed shops.

2. FCA has come back in a new Avatar with Jeep.

3. Ford was never profitable in India based on the information from my friends and other sources who work in Ford.

One of the main reasons for the failure I see is a poor product strategy that indirectly impacted the number of lineups in the brand's portfolio.

I guess it's the same story with Renault and Nissan as well - however, it looks like the story of Renault & Nissan is somewhat similar in other markets as well. So I assume we don't have to dig deep into the failure of RNAIPL.

This is an open discussion to understand more about the India Automobile Scenario and its dynamics for the success and failure of reputed brands of the world. Please share your thoughts.

Here's what BHPian museycal had to say on the matter:

Lack of local, India first business strategies

More often than not, the American companies, being the global conglomerates that they are, search their existing products and brands bin and introduce the readily available cars in India. GM seems to be the worst offender amongst the American companies. Cars like Chevrolet Sail, U-VA, Captiva, Opel Astra, Corsa, Vectra etc. are examples of this. When American companies did get down and make an India first product, they did taste success, eg., Ford EcoSport, Ikon, Indian Fiesta, Chevrolet Beat etc.

Lack of innovation and vigour in NPI (New Product Introduction)

Except for EcoSport, the American companies have hardly been at forefront of creating new niche in the Indian car markets. Similarly, even in the segments already established, the intent to take on competition by the horns is hardly seen. In the burgeoning compact and sub compact SUV segment, except for EcoSport (which is almost 9 years old product now), Ford still doesn't have a car to take of Creta/Seltos combo!

Indian market needs and American auto makers USPs don't align

Our price sensitive, value conscious market is quite different to the USPs that American car companies usually offer. We, as a country, have rewarded frugality, value (perceived and objective, both) and service acumen. Internationally, except for Ford in Europe and the tightly controlled Chinese markets, American car companies usually don't fare well where the market needs are closer to Indian tastes. Americans find it difficult to do cheap, cheerful and value based products, case in point - Harley Davidson.

Indian operations are usually marginal, and thus, susceptible to large economic changes

Since Indian business do not contribute majorly in their global operations, the will and focus to rectify things is even lower. Simply said, Indian operations of American companies are hardly critical for their top line and bottom line. Hence, it is sometimes easy and prudent to just pack the bags and leave in the events of loss of market share, pandemics, recession etc.

Here's what BHPian Durango Dude had to say on the matter:

With the Govt milking the car companies for taxes, it isn't difficult to see why we end up paying F-150 money for an Endeavor in the Indian context. America is the land of excess and it's no wonder they can't cater to Indian market as we dangle at the fag end of the food (car) chain and lap up cars with a rather small footprint: My brother once quipped on his return from the US when I took him for a ride in my diminutive M800 in the 90's. They use the same size car's for 'golf carts'. I don't blame him and he has returned to India and drives a Renault Kwid now along with a Nissan Sunny CVT. In the US Govt and companies dangle some of the juiciest carrots in front of the consumer at real attractive rates where you're encouraged to splurge with low savings rates where as here Govt dangles a 'bambu' and add the loan sharking rates of interest offered for car loans, it's a dampener for most except those with deep pockets to afford real fancy cars. Gasoline is excessively expensive, diesel is discouraged and we're penny pinchers and it's no surprise that the American Car Companies fall flat on their collective faces when faced by the Indian consumer. Can any Aam Aadmi real afford to own and operate a real full fat American V8 and where is the infra for a good electric car and how many can afford a Tesla??

Here's what BHPian landcruiser123 had to say on the matter:

For the same reason why Suzuki wasn't successful in the US and pulled out a few years ago - Lack of products suiting the local customer base. "To go truly global, you need to go truly local!" India's car market for most people ends at the Corolla/Civic. US car market begins at the Corolla/Civic for most people.

Ford's case is a bit of a surprise here because some of their smaller cars are bestsellers in Europe.

Here's what GTO had to say on the matter:

USA car companies have always been "USA centric" only. For one, their home market is HUGE and incredibly profitable, especially on those pickup trucks & SUVs they sell. Example, the Ford F-Series truck sells 800,000 copies a year at an average price of $40000 - 50000. Do the math. Their home market itself is insanely profitable & gives them the volumes.

And it's not just India. USA car companies are quite weak globally. GM has been burning money in Europe, and just lucked out in China thanks to a smart executive or two who decided to invest there (China is the reason Buick is alive). But other than China, you will be hard-pressed to find GM strong anywhere else. Ford has a handful of small-medium successes here and there, but still isn't a truly global player like Toyota, Honda or Hyundai. Chrysler is USA only.

Lastly, the big 3 USA companies have always been in a continuous cycle of boom & bust. See their history from the 50s and every decade has seen them go strong, and then dangerously weak. All of them have skirted bankruptcy multiple times (GM & Chrysler even went bankrupt in 2008-09).

Check out BHPian comments for more insights and information.

 
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