Sid­dharth strate­gises to safe­guard man­u­fac­turer' in­ter­ests in In­dia


EVER SINCE THE DOWN­FALL OF GEN­ERAL Mo­tors in In­dia there has been some rather ridicu­lous and yet un­der­stand­able spec­u­la­tion about oth­ers who may go the same way. The name that tops that list is – be­lieve it or not – world num­ber one car­maker Volk­swa­gen! Well that shouldn’t be a shock, con­sid­er­ing that very ti­tle was held by GM not so long ago! Peo­ple be­lieve that it will ei­ther be the Volk­swa­gen Group, Nis­san or Ford that will be the next big name to drop out of In­dia. Now I don’t be­lieve that to be true, as each of them have in­vested 1000s of crores in to this mar­ket for some time now. They have also been very clear about the need to suc­ceed in In­dia as it is des­tined to be­come the world’s third big­gest car mar­ket in the not-so-dis­tant fu­ture, be­hind only China and the United States.

In the case of Nis­san, it is true that the brand has failed to make a mark, but the com­bined en­tity of Renault-Nis­san (in­clud­ing the mea­gre con­tri­bu­tions of the Datsun brand) still com­mands a re­spectable share of the mar­ket. Ford used to have a more for­mi­da­ble po­si­tion by share of mar­ket, but has slipped as the mar­ket it­self has grown. And the real rea­son is the in­ex­pli­ca­ble fail­ure of the new gen­er­a­tion Figo and its sedan al­ter ego – Figo As­pire, to per­form to the lev­els ex­pected. The EcoS­port con­tin­ues to hold on, though I reckon its flag­ging sales will get a shot in the arm when the facelift ar­rives this fes­tive sea­son. And then there is the En­deav­our, and brand-shap­ing Mus­tang that play flag­ship roles still.

Volk­swa­gen on the other hand has big­ger prob­lems. Its group brands VW and Škoda have still not had a run­away hit on their hands – un­like the bold start made by the first Octavia in 2001. The VW brand finds ex­ports to be higher num­bers in most months than do­mes­tic sales and that is very wor­ry­ing. Add to that the dis­dain­ful treat­ment of the ap­par­ently im­por­tant In­dian mar­ket – by re­fus­ing to bring us the next gen­er­a­tion MQB-based Polo just yet, or of­fer­ing a Tiguan as a lux­ury prod­uct, and even ig­nor­ing In­dia when it comes to flag­ship global mod­els like the new Pas­sat or Golf. I am not sug­gest­ing we get stripped down ver­sions of these cars, nor that VW should blindly launch them at what­ever prices they come to with the cur­rent In­dian tax­a­tion regime.

So what am I sug­gest­ing? There needs to be a three-pronged plan in my view that each com­pany needs to take on – to pro­tect their ex­ist­ing in­vest­ments, and fu­ture po­ten­tial from In­dia. First – in­vest more. Yes you read me right! More in­vest­ments to­wards a) ramp­ing up tech­no­log­i­cal prow­ess of In­dian ops to ac­com­mo­date fu­ture ready tech­nolo­gies and plat­forms (case in point MQB from VW Group). This will al­low for greater flex­i­bil­ity to of­fer In­dian made world-class cars to other mar­kets while still be­ing able to achieve the economies of scale needed to keep prices com­pet­i­tive. This would also mean trans­fer­ring some tech to the In­dian op­er­a­tions to al­low for much higher per­cent­ages of lo­cal sourc­ing – though Ford has done some of that al­ready. Sec­ond – think lo­cal, but project global. As vague as that sounds, these brands need to re­alise the value of keep­ing the In­dian consumer in good hu­mour by of­fer­ing global name­plates in In­dia at reg­u­lar in­ter­vals. Would that be cost ef­fec­tive – not al­ways, but you need mar­quee prod­ucts like the VW Golf, Ford Fo­cus, or even the Honda Civic (yes drag­ging Honda in con­ve­niently yet aptly here!) to project the strength of their brands on a world­wide scale. The In­dian consumer will pay for value – at higher price points too – if they see it that is. And Third, per­haps most im­por­tant – get the net­work right. Each of them has been here long enough to un­der­stand the In­dian mar­ket, and its con­sumers for the most part. The cost of own­er­ship and over­all cus­tomer ex­pe­ri­ence needs to be en­hanced se­verely. Ford has in­deed be­gun this jour­ney but VW and Škoda have miles to go.

Is this a guar­an­teed suc­cess plan I have en­vi­sioned for these brands? Of course not – it will also take a lot of hard work, sin­cer­ity and com­mit­ment to see it through. And they cer­tainly have enough peo­ple work­ing to fig­ure out these strate­gies and needn’t con­cern them­selves with what I have to say! But cut­ting corners on prod­uct will only get you so far – de­spite the suc­cess of the two strong­est brands in the mar­ket. And so in­stead of try­ing to em­u­late the suc­cess of those two play­ers, by do­ing what they do, Ford, VW and Nis­san need to fo­cus on get­ting what they al­ready do, right. So give us a lo­cally made Kicks, and fol­low it up with a lo­cally made Juke! Be bold and throw us a fully loaded Fi­esta hatch, Fo­cus sedan and Kuga com­pact SUV! And yes it's high time we got more than just the Polo and Vento (okay and Ameo) VW In­dia! The Tiguan (and im­mi­nent ar­rival of the Ko­diaq) are steps in the right di­rec­tion. But blitz us with more. To not only ex­cite the mar­ket, but to safe­guard your own long-term in­ter­est in this very im­por­tant, tough and com­plex mar­ket. Yeh dil maange more – and how! ⌧

‘The In­dian buyer isn't in the mood to ac­cept 'for In­dia only' type mod­els


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