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Two players (Maruti and Hyundai) hold over two-third share of the Indian auto market. The next 8-10 players fight it out for the rest, making it a challenging battlefield. Even at the individual level they grapple with unique issues. FCA’s (Fiat Chrysler Automobiles) challenge is to transplant the Jeep’s American legacy to a consumer who may not be acquainted with it and not ready to pay a premium for it.
Renault has to sell its hatchbacks to a consumer used to flagships from Maruti and Hyundai. And Czech-born Skoda has to convince Indian consumers about its ‘value luxury’ positioning. As reported in Brand Equity, Toyota’s Etios got stuck in the taxi-groove in its early days and has been trying to shirk that tag off ever since.
Many of the brands struggling with a meagre share, are global giants powered by some of India’s hardest working marketers. But an examination of what they are up against illustrates why they are where they are and what they are doing to move onwards and upwards
Jo dikta hai woh bikta hai
Indian consumers gravitate towards brands that sell best, figuring millions who came before them could not all be wrong. And so having sold many cars so far, allows Maruti and Hyundai to sell many more. Larger players typically have the most comprehensive sales and service networks which makes it a circle even harder to crack.Which is why everyone from Ford to Skoda is running campaigns emphasising service and low cost of ownership.
The sub-5%ers are often unable to answer the ‘what’s new?’ question Every auto CMO plans for initial peaks and follows it up with regular refreshes. Sumit Sawhney, country CEO and managing director, Renault India counts two important trends: reduced lifecycle of cars in India and more aware Indian customers due to multiple digital platforms. Around 8 years back, the lifecycle was over 5-6 years, but now you have to bring in changes every 2-3 years, he adds. Companies willing to invest in such refreshes, stand to gain.
Partha Sinha, vice chairman and managing director, McCann Worldgroup had a harsh if realistic evaluation of the Indian consumer in a previous issue: “The market doesn’t care much about safety (seen any Indian using seat belts in the rear seat? Not even children!), or build quality or engineering excellence.”
The Indian consumer is ready to pay as long as the value equation is right. The challenge is that this value-equation is constantly moving, points out Vivek Srivatsa, head marketing – passenger vehicle business unit, Tata MotorsBSE -1.94 %.
Delna Avari, management consultant and former marketing head for Tata Motors’ passenger vehicles division, however believes perception will always trump technology, safety, etc.; “At the end of the day, the differentiation in cars is in the mind of the consumer more than in the product itself (sorry, dear experts!).”
Features that resonate with consumers elsewhere have scant impact here; safety for instance. A WHO report from 2015, revealed a staggering 2,07,551 road traffic fatalities in India. And yet carmakers trying to sell models with “expensive” safety features have an uphill task. It can be done, as Toyota found out, but it takes a lot of doing.
The Japanese car maker was the first in the mass market to standardise front dual SRS airbags across Etios at the cost of the infotainment system. Says N Raja – senior VP and director, sales & marketing, Toyota Kirloskar Motors, initially, it was a challenging task for the dealer’s sales staff. But with explanations about its importance and forthcoming safety norms, customers became receptive. The result: a sales growth of 13% for the Etios series of models post airbags standardisation.
So what hope exists for the sub-5%ers? Views Anisha Motwani, managing partner: StormTheNorm Ventures and former CMO, General Motors, “the biggest opportunity is they are not straddled with long-seeded consumer experiences and expectations. In many ways they can make a clean start and write their own narrative.”
courtesy by Amit Bapna, The Economic Times, 14th December 2016.