re: The Tata Punch (aka Hornbill) Compact SUV Early to market always has advantages. Late to market mean higher barrier of entry and lost opportunity.
There was a company called Hero Motors under another arm of Hero Group(Hero Motors, not Present Hero Motocorp). Hero motors best known for Hero Puch and few other mopeds, scooters). Honda had tie up with Kinetic for scooters, best product, Kinetic Honda and Bikes with Hero Honda, CD100, CD 100SS, CD Delux and infamous Splendor.
Honda wanted to have its way. Even Suzuki and Yamaha wanted their own ways knowing that Indian market is huge. Every one started breaking ties.
Lets look at the history. Honda first severed ties with Kinetic. Kinetic never recovered. Because Kinetic did not have a plan B.
But severing ties with Hero Honda was a big risk for Honda. So what they did was something shrewd. They started own company HMSI and started making first geared scooter, which was a flop but automatic scooter Activa clicked. They did not break ties with Hero Group until Honda was fully established with Activa product line and they had setup sales and show rooms every where.
Meanwhile, Hero Motors, a part of Hero group had no relationship with Honda. They could have started a equally good product similar to Activa, either their own or some other foreign technology and sold along with showroom which were selling Hero Puch 3G and other scooters. No, They did not!! Hero group chairman repeatedly kept saying Honda will never part ways with them. And finally when relationship was broken, Hero had to start their own R&D from scratch and had to pay royalty to Honda for few years even after break up, for the engine they were using in the product line.
Meanwhile Activa had reached selling over 3 lakhs per month. Hero came out Maestro, which was almost similar to Activa but failed. TVS came out with Wego, but failed. Only TVS Jupiter came close with decent numbers but even today Activa is a well established brand selling 3 lakh units a month.
If some one tells me that only Honda can manufacture product like Activa and not Hero motors or TVS, then I will say, go and drink a cup of tea. Hero Motors, TVS and our own bajaj could have manufactured a product far better than Activa. But they failed to see the new product coming in their own backyard and dismissed and lost the market share.
If hero Motors had woken up when Honda was selling at around 30,000 or 40,000 units month of Activa, probably they would have started a development of product and would have launched when Activa was selling around a lakh per month. No! They waited till marriage was broken, took over one year and then launched Maestro, when Activa was selling over 3 lakhs a month consistently for years. These companies Bajaj, TVS, Hero virtually gave the market share on a silver platter to Honda, Free... Period.
Maruti Omini: You call it unsafe, junk, tin can, but sold minimum 5000 units month, No advertisement, No promotion, Nothing. Not even design changes for years, until safety standards kicked in and the product was removed from sales.
Wagon R: This vehicle never had competition, Tall boy design, Call it unsafe, ugly, what ever. Always sold over 10,000 units a month. Never a flop. No one could come with a comparable product.
Swift and Swift Dzire diesel: What was Tata doing when these products were entering market?
Early to market always has its merits. You come first, make mistakes, customers will forgive you. Because even they don't know about that. But if you are second or third, immediately people will start comparing, bench marking. Meanwhile, the first one who came early, would have recovered the cost of development, dyes, manufacturing capital expenses, will now reduce price to kill the competition. Now the second or third guy will not only try to capture market share but also fight price war and recover his development expenses.
This is why Tesla is successful even where established players are failing.
This is why Maruti is successful where Tata and Mahindra failed.
Manufacturing is a whole different ball game. It's business and it's brutal.. |