Big B's Big Plans...

It seems like BMW is getting really aggressive in India. The recent actions are very evident. BMW announced the X1 the cheapest SUV from BMW for India during the auto expo at Delhi. And now the announcement of 320d CE (Corporate Edition) for individuals at around Rs 24 lakhs has come. Earlier this downgraded version was available only for corporates and institutions who buy a minimum of 3 units to-gather. The company is also setting up its used car business with its own financial services.

This proves that BMW no more wants to be a niche player in the premium segment. The company is planning to leverage its Ultimate Driving Machine to a bigger market. There is a huge potential in the premium car segment in India that is still untapped. This segment of consumers is actually confused. They expected a real premium brand to satisfy their Self Esteem and were not ready to shell out the real price for it. It seems like BMW understood this and is acting fast. Before the traditional rivals Mercedes and Audi could possibly enter this segment BMW wants to grab a maximum market share.

Now the Accords, Passats and Superbs have to worry. Can they compete against an Ultimate Driving Machine. But for a consumer like me, who dreams of owning a BMW one day, it seems like the day is not too far.

When Mercedes India proudly said they are back at No.1 after Jan 2010 sales, the BMW India CEO replied, 'There are still 11 months to go'.

What a statement !!!

the conFUSION is now gone...

Ford India has taken a wise decision to axe Fusion. Though the model hardly sold in the last few months, the decision had come at the right time before Figo hitting the showrooms in the first week of march. This is a wise decision because, the cars look somewhat similar from certain angles.

The biggest mistake in Fusion was its pricing. At 6.5 lakhs to 8 lakhs, there were more exciting models available in the market. And its station wagon like feel, confused the buyers and hardly drove in customers. Also Ford did not push the brand much as it did for Fiesta or Ikon. There was nothing to remember like 'The Josh Machine' or 'Go Fida'.

With the same platform and the same wheelbase as in Fiesta, the Figo is all set to go at an expected price range of 3.5 to 5 lakhs. This should be ideal for a car like this. It seems like now Ford is clear in what it is offering to the market and what it is expecting from the market. So, the conFUSION is finally gone.

Is it time for FIAT?

There are mixed news about Fiat India, ripping Palio. Though Palio sells a meagre 50 units every month in the 2000 units that Fiat sells via its Tata-Fiat dealerships, its the entry level hatchback that the company offers against the Indica and Swift. Logically, its been some time that the model is around and it needs a major upgrade. Fiat, as of now have not mentioned anything about Palio meeting the BS IV norms which means the model may be discontinued.

Now, this can be good from profitability point of view. But a company which has Ferrari and Mesarati in its portfolio is not ready to play a solo innings. Punto cannot survive against Indica Vista and Linea cannot fight Indigo Manza when presented to a typical customer. The Tatas are strong in their utility ratio. Though its the same engine in all these cars, Tatas score on the value for money column. So presenting them next to each other is not a good idea. Now that the Punto and Linea have gained a market for themselves to sustain, its time for Fiat to move on.

Fiat on the other side have released pictures of an all new Palio. As I've mentioned in my earlier post, though its not very clear on the next move with Palio, for the company to taste its share of the small car boom in India, its time to go alone.

Will ARIA be another winner?

Tata announced its entry into the MPV segment with Indicruz in early 2008. And now after the actual revelation of the vehicle as Aria powered by the popular 2.2 DICOR engine, the MPV market is getting geared up. The other players in this crossover segment are Innova, with a leading market share and Xylo following it.

But for the first time, it was surprising to see Tata going ahead of competitiors with Aria. The vehicle is priced at around Rs 12 lakhs to Rs 14 lakhs. Though it is fully loaded with features like 4 wheel drive, GPS, Parking sensors, dual ACs, 6 Airbags, ABS, head mounted LCDs, etc., which justifies this cost, its quite interesting to see the way Tata wants to position this vehicle. It seems like Tata wants to position this for a premium segment in the SUV target market.

But, there is a check. At this price point, customers would expect the car to be of a better quality than Innova. And customers perceive Tata cars are always not comparable with Japanese or European cars. This perception of the brand may demean the image Aria wanted to enjoy. The way Tata is going to address this gap will decide the success rate of Aria.

This will also test the strength of brand Tata and its marketing abities in this new segment. The live example for this from Tata's stable is the Safari. Though Safari was positioned at a premium segment through its communications, the product quality never met the expectations of the consumers in its segment. Though not a  failure neither was it a success. Hope Tata took some lessons from it and play the game differently.

A true CLEAN Performance - Hybrid from Porsche

Audi @ this Olympics

Automakers Beware!!!

Case 1:
Last week a friend of mine booked a Thunderbird. The choice was made by his Fiancée. Sweet isn't it.

Lesson 1:
Its no more the target segment that matters. Need to attract the influencer too. In reality as found by Volvo during its Your Concept Car (Refer here for details), an influencer, especially women, make a huge impact, even in the purchase of vehicles designed for a niche target of men Eg: Thunderbird. So automakers, expand your target segment.

Case 2:
Another friend of mine decided to gift his father an SUV. The discussion narrowed down on Toyota Fortuner or Ford Endeavour. A previous poor experience from a Ford dealer on his Ikon resulted in going for the Toyota. No second thought.

Lesson 2:
Just opening up dealerships or setting up service centers doesn't work anymore. The people P has a critical place in the business. So train people at dealerships and service centers to handle people better than handling cars. One lost opportunity to serve is a customer lost forever.

So automakers beware!!!

The End of an Era

Lets first go to 1984. The real transformation of Indian Automobile industry. When the consumers had no choice other than the Ambassadors and Premier Padminis, Maruti with Suzuki brought in the legendary M800. With a 796cc, naturally aspirated petrol engine, M800 was the King of Indian roads till its sibling Alto took the throne in 2004. Even then it was just the second most selling car.

Then came in the emission norms. The company, after looking at the cost involved in upgrading the engines to meet the Euro IV norms, decided to axe the car in a phased manner. Its first happening in 13 cities.

In less than 5 years M800 would be history.

Though no big changes were made in 26 years, the car always underwent minor face-lifts and technical upgrades like factory fitted LPG/CNG kits to sustain its Numero Uno status. Its the M800 that comes into the mind first when one thinks of Maruti.

How did this happen?

Initially there was no huge competition in this segment. The customers actually had no choice. But as the market evolved, to stay in the race, Maruti kept updating the car. As the industry grew, the product also grew. The product never entered the maturity stage. Though there were bigger and more efficient offerings in the market, none were able to take M800 head on. This was actually because of the reliability the product had shown over time. This translated into Maruti's other products and the result is a whooping 50% market share. This product again demostrated the power of the product P ahead of the other Ps in automobile industry.

The only possible successor to this throne is the Nano. Lets see, if it can become the next Darling of the Masses. Time will tell.

The New BMW X1 - Cheapest BMW on Indian Roads

Why all the eggs in the same basket?

TVS had announced the launched of RTR 220cc. Again a case of squeezing the cow to the fullest. This time on the upper side. The new RTR 220cc is expected to feature ABS, a first in India. After a close to washout in the entry level and commuter segment, TVS had just decided to gain the max from its only running horse. Why cant a company who had Shoguns and Samurais, create a competitive product.

TVS should learn from Yamaha instead of following Bajaj. Other than RTR, it should bring its racing passion back in its riders. Make a new entry in the 100cc and 150cc segment. Strategically, TVS should focus more on R&D. Also TVS is typically seen as a South Indian company and is never a huge brand in the rest of India. So it should also focus on re-establishing its brand image.

TVS should ideally go back to the basics. Identify a target segment, capitalise on it and lead the market, rather than trying to find a place in all the segments.

Not just the Hatchbacks...

Rolls Royce Ghost - 2.5 crores - 60 cars since December 2009

Mercedes SLS AMG - 2 crores - 5 cars since January Auto Expo at Delhi

Porsche Panamera - 1.5 to 2.0 crores - 50 cars from Oct 2009 - Dec 2009

Need to say more?

Its not only the hatchback segment thats booming in India. India is also attracting the luxury car makers. Its no more that the phased out versions of these manufacturers will come for us. Its again in line with the global launch of these models. While the bottom of the pyramid is growing, its also the top of the pyramid growing.

All we need to see is, if this growth is sustainable or its just a temproary boom.

Too much of anything is Good for nothing

Renault had decided to review its JV with M&M. After a disastrous performance of the Logan, and Nissan coming with huge plans, nobody would have expected such an announcement. So in India Renault will be with...

1. M&M for an upgraded Logan,
2. Nissan for Micra and future launches
3. Bajaj and Nissan for the small car project

Will this work? One country. One company. Three partners.

I really wonder, how can a company, who had still not landed up safely in Indian market, can make such a move. The culture of three different organisations and three different target markets will rip Renault more than its current form. This just shows the desperation Renault has to gain roots. Its rather wise to focus and get one opportunity on track than exploiting everything available.

Is Figo planning to be a silent killer??

Ford announced that Figo will be launched in March 2010. While Figo had to go head on with Chevy's Beat and  yet to come Polo from VW, Ford has chosen to be very conservative in its marketing strategies.

When Volkswagen announced Polo, it started its brand building exercise much earlier. Similarly when GM launched Beat, though there were no big ATLs, there were enough BTLs taking place. Also, both these brands took place in the recent Auto Expo at Delhi. But in contrast, though Figo was announced for the Indian market almost during the same time like the competitors, there was never a great promo in place.Ford also needed a brand building exercise as the brand is perceived to have high running costs.

But after the recent announcement of Ford, it seems like, the company is trying to get the basics right. In automobile industry, if the product P is right, then the success rate is high. Figo, I would say is more suited for a Indian consumer in terms of value for money. Its more reliable and seems to have a better utility value.

Having said all this, lets see how the 'new blue oval' is going to fair against its German and Japanese rivals.

Fazer - Freedom