Nervous NEXA ?

The prime object of Nexa was to give a make-over to the image of Maruti Suzuki, from a mass car manufacturer to a premium car maker. Though the first attempt in the recent times was bring in the CBU – Kizashi, Nexa was the serious and dearer attempt.

Had Maruti achieved what it intended through Nexa ?

By over pricing the S Cross, and placing it in an exclusive channel, Maruti would have thought the job is easily done. The market then rejected the idea. I strongly feel, Maruti had pressed the panic button soon, and launched the Baleno, a premium hatchback at an ordinary hatchback price, making it exclusive at Nexa again. If not at Nexa, its profitability would have been a question.

With the today’s launch of the Brezza, Maruti is planning to sweep the compact SUV market with its killer pricing again. But the product will be available through the regular network.

One new launch at Nexa with mass pricing and another new launch at regular channel with mass pricing may ensure Maruti’s sustenance as a market leader. But Nexa as a concept, has lost its prime objective.

Changing the brand positioning and the brand DNA was never easy and in India it will continue to be a huge challenge. May be, Maruti, with all its mighty backup should clearly chose its area of play.

A True Dream...

Genesis from Hyundai

Is the 'Rhythm' correct?

When Toyota launched the Etios, there was a little speculation from the market about its positioning. But clearly the problem of dissonance in brand positioning was visible. The postioning of Corolla Altis and Camry in their respective segments are at a premium. Corolla is targeted against Honda City and Camry fights with Volkswagen Passat, Volvo S60 & Honda Accord.

Etios is placed in the entry level sedan segment where it is intended to grab share from Swift Dzire and Tata Manza. The other miniscule players in this segment are Verito from Mahindra and Indigo(CS). Inspite of Dzire and Manza having space premium, they are positioned in a way to attract customers in personal segment. Tata clearly has distinguished the Indigo brand from Manza in this context once Indigo was beginning to gain popularity among fleet owners. This is where Mahindra’s Verito lagged since the Logan days.

This situation is not new to Toyota too. Right from the Qualis days, the company had issues in positioning. Little did Qualis attract the personal segment since its launch? When Innova came in, though it was positioned as a MUV, it was priced at a premium and 50% of the sales came from top-end variant. Also every second vehicle sold was to customers with personal usage.

Now Etios having a great demand in the fleet operating segment, brand Toyota is again at a risk of getting diluted as a taxi brand. A repeat of Qualis is likely. What are the potential reasons for such a situation again with Toyota?

1. With such a premium in the Indian market Toyota wanted to gain share by entering into the mass market.
2. But, on the contradictory, Toyota in India was seen as an aspirational brand. Initially the thrill of owning a Toyota without burning the wallet saw the brand ‘Etios’ gain popularity. Over a period of time, this may make the brand look ordinary that anybody can own a Toyota placing it amongst Maruti and Tata.
3. The product was rightly designed to meet the need of cab operators thus leading to bulk fleet bookings.

So what? Isn’t it good for the company when it decides to play in the mass market? More volumes mean more business and more profits. So where is the problem?

This is a high risk situation for the Corolla and Camry. Will they continue to enjoy their premium? 

The dissonance will be answered by customers in the time to come.

Its Tata Again...

A Melody, yet to rock...

All that I am going to talk, make your pardon, write, about is the Aria from Tata . After the grand opening in October 2010, this was the one vehicle that was expected after the Nano from Tata's stable. When it was launched I did mention about the product and the serious doubts I had about its success in the Indian market. 

Before discussing further lets just have a look at the Indian Utility vehicle scenario for the last four months.

Data Courtesy: Indianautosblog.com

Though this chart puts all the vehicles irrespective of its target segment, lets focus more on the Innova, Xylo and Aria which are targeted to the same set of customers.I need not explain the scene much. Its clearly the Innova that is the undisputed leader in the segment inspite of Xylo and Aria taking it head-on. And the difference in sales is huge that Innova does not have any threat in the near future. Aria is not even 10% of what Toyota sells in this segment. 

Lets review the basics and see where/what exactly Aria lacks. 

Coming to the Product, definitely even a layman would agree Tata had offered more than the Toyota.  Though the build quality doesn't seem to be a problem ( this has been the best from Tata yet), I still leave it to the customer to decide on which has a better build quality. The Promotion and Placement too doesn't seem to be a problem as Tata has a very good network next only to Maruti Suzuki and the Tata Ads, be it ATL/BTL, are one of the best in the Automobile industry.

So, what about the Pricing? This is one which had a problem since the launch. 12 - 14 Lakhs for a cross-over from Tata is what customers think. May be the full time 4X4, GPS, Head mounted LCDs, 6 Airbags, Climate control, Audio control on the steering wheel, all of these could have been on the top end variant or may be an addition package. Whoever wants these could have/would have opted for it. Removing these features would have reduced the price to the 10 - 11 Lakhs range which is in the league of Innova and the Xlyo and this would have made Aria a serious contender for a family mover. 

Then comes the Positioning. As I wrote earlier about Toyota with Etios, its the same concern with Tata too. When people see your brand as one and you claim no you are different, there is a serious problem. And you cannot appeal to two different set of customers. This might put the brand under huge risk. When the customers see a Sumo Grande and a Safari along with Vista and Manza which are very competitively priced for the masses and still offer the best Value For Money, definitely the ARIA with its premium will get a big NO. 

So immediate corrective measures for Aria to rock volumes, trim the product, reduce price accordingly and re-position it.

And why did I name Aria as a melody in the title of this post? Thats because, the Italian meaning for Aria is Melody.

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