[ashking101]

Originally Posted by vamsi.kona

The ultimate reason for failure just lies with the companies and nothing else. Some of us are blaming the tax structure, customer behaviour, etc, which is not right. The tax structure is the same for every company operating here.

I also don't get this blaming of Indian consumer for being a miser with his/her money. Most of the people who buy a car, especially first-time buyers would be shifting from 2 wheelers to 4 wheelers, so their concept of safety is drastically different from a wealthy person who can afford better cars. For a person who was riding a 2 wheeler with 1 or 2 kids and their partner, a tin can is far safer than the 2 wheeler.

Also, we make a joke of 'Kitna Deti hai' mentality of ours but isn't that a valid concern unless you drive the vehicle for purely sporting reasons. It not only makes economic sense but also from an environmental point of view, which we started to worry about off late.

Ford and Hyundai started their operations around the same time. The same is the case with GM. So the tax structure and market conditions were the same for all three of them. So ultimately it was the management of those companies who can be blamed for their failure and nothing else.

Absolutely agree with you, buddy . If anyone says that Indian tax structure and consumer mindset are the reason for the failure of these US automakers, then they need to look at Hyundai, Suzuki, Tata, etc (to an extent Renault also - consistently enjoys 2-3 % of market share over the past decade) and understand how they sustain their business amidst the same Indian tax structure and customer mindsets.

So, the fact is, the success in any business - not just automobile industry - comes from having a clear business vision, strategy and an effective management team to execute the business blueprint specific to the market they want to grow.

[locusjag]

Originally Posted by ashking101

So, the fact is, the success in any business - not just automobile industry - comes from having a clear business vision, strategy and an effective management team to execute the business blueprint specific to the market they want to grow.

Aligning with what you're saying - and pointing out something we haven't called out so far - we are missing the organic element of executives and their buy-in into past decisions made by other executives. Ford will have entered India based on some other exec's say-so in a different point in time. Seated in their Nth floor in Detroit HQ in 2021, Ford's top echelons might very well think they don't need to kowtow to the past decisions made by Ford's ex-executives. Jim Farley has been CEO since the end of 2020 and there have been other key exits/entries a bit lower down their hierarchy in their leadership as well. These changes were inevitable.

For instance, when Jack Welch took over at GE, he had the ignominious moniker "Neutron Jack". After becoming CEO, he went on a ruthless selling spree of sub-units (e.g., consumer electricals) of GE which he didn't believe made sense to his long term vision anymore and he ensured GE remained only in a handful of businesses by the time he was done.

[maxratul]

1. Indian Tax Structure is ridiculously exploitative, making sure Cars are over priced and/or under engineered.

2. Companies found success within this structure by catering to public demand. Whether those are compromises or astute business sense is in the eye of the beholder.

3. Mass Market Indian consumer is tightly value conscious, given our PPP, state of infra and ownership costs.

All these statements are true. However, the reason why American (or any other car company) left these shores is mainly point 2. Points 1 & 3 are issues that affect the overall price/quality matrix of the market, and doesn't explain individual failures.

[Living2Drive]

The day Government makes rule that vehicle tax and insurance will be directly biased to your crash rating, lower the crash rating higher the tax and insurance. That is the day Safe cars will be built in India.
Otherwise this will be the scenario.,
I need a car for daily runs, half yearly or yearly family out station trips, should be easy on pocket, parts should be cheap, should be cozy and comfortable, mileage should be excellent. some chrome and shiny parts to give a premium look.
For crash safety I have Ganpathy Bappas statue and will write Jai mata di on the wind screen. vehicle handling characteristics? I am driving for long time, i know all the roads and i will take care.
This is the mind set of most of the Indian customers, To prove this lets take few vehicles.
1)Santro, It made pathetic numbers in Europe for worst crash safety in that decade. whereas in India it sold in millions. GetZ is the first 4 star crash rated hatch for Hyundai globally, but hardly made any numbers in India.
2) Toyota Qualis is tagged as abortion baby by its own engineers, but shot over the roof in India, in the same way Corolla and Camry are globally best sellers but hardly made an impact in India.
3) same with Global fiesta and Rapid, both are the best handling cars in the segment till date, but the crowd only fell for Verna.
Both Maruti and Hyundai (now the cheap chinese MG's) have used this trick and are minting money with such unsafe cars. There was point in time Maruti advertised that they will not send their cars for crash certification and still selling big numbers & this purely is because of lack of knowledge of customers. This continues till date with Eon, i10, xcent, Alto, Dzire, baleno, Ertiga, XL6, etc...

Safety and handling is one of basic business ethics which VW group, GM, BMW or Ford will never compromise even at the cost of losing business.

My friends unforgettable experience, he was on his global fiesta fish tailing a verna at 100+ speeds and in the chase got t boned by a Tata 207 came out of no where and merged from the side road and hit both the vehicles. Fiesta rolled 8, 9 times (like a rally car multi directional roll over)and landed close to 100 yards away from the road, vehicle was brought to 2/3rd of its original size, cops came to the spot looked at the vehicle and did not believe that he was the driver, all the 4 occupants escaped with muscle sprain and glass scratches. On the other hand the verna which had rear left hit drifted side ways and landed on its side in a trench, co driver died on the spot as the A pillar crumpled and shot though the roof penetrated into his skull, drivers got his right leg squeezed in the mangle and lost it for ever.
Had it been a gernman or american built car, the verna occupants would have lived to till date to talk about this.
Except Hyundai, MG and now renault, no other global player will take such cheap short cuts to sell cars. So untill the customer mind set changes, industry will not improve.
And we'll only be left out with unsafe cars.

[Kosfactor]

Originally Posted by Living2Drive

Safety and handling is one of basic business ethics which VW group, GM, BMW or Ford will never compromise even at the cost of losing business.
.

Do not give these companies the benefit of doubt, they do not deserve any.

indian-nano-alto-figo-i10-polo-fail-global-ncap-safety-test.html (Indian Nano, Alto, Figo, i10 & Polo FAIL Global NCAP Safety Test)

Just good old corporate companies selling whatever that can be sold legally, including fancy marketing.

[AirbusCapt]

The hype surrounding India post the 1991 liberalisation was heady. It projected a nation of over 250 million 'middle class' growing at about 8% who had the income levels of mid income countries and who were hungry for a good life. This sounded like the proverbial El Dorado for auto makers from across the world. Their economics and projections were skewed from the begining.
In reality India never had the mid income middle class to begin with. Our actual middle class who could afford American sedans were merely about 20/50 million (a tenth of the projection) and it was not growing. Infact due the silly policies over the last decade this class has at best stagnated of not shrunk. That's why the huge investments in factories didn't pay off. India doesn't love the Maruti 800. It can collectively only afford the Maruti 800. Now that these companies have woken up to the reality, they are in a hurry to pack their bags and leave. It is a sad reality not only in the automotive world, we can see it in almost all sectors be it high end luxury goods, personal devices, business class airlines, star hotels etc. The investment, the actual business and the heady projections just don't add up.

[forty6]

GM failed in India, in my opinion, because it bet its horses on buying Daewoo and then selling their producits in India. That was their grand plan, bet, and it failed. We Indians are a weird lot. For us to to buy something, a lot many of us have to start buying that thing. This is something every fresher has faced, for job you need work ex, and for work ex you need job.

Ford had a good stint, but couldn't convert it to good inning. Anyone who had driven a Ford will know that car is a Ford. It has that unique angle. The Ford Ikon was a brilliant car to drive. Many other things might have been wrong, but it was a good driver's car. And that they made good driver's car is at the root cause of their failure. For what makes a good driver's car, also makes for a car that will fail on many things that Indians want more. A good driver's car will have a thirstier engine. Will be heavier (unless of course you are Colin Chapman). The steering will have heft. The tyres will wear faster (for you will enjoy hooning it around). Not to mention making cars to a price point means you got to sacrifice lot of other things. So, some of the other necessities, like a good AC, bullet proof electricals, good reliability are sacrficed.

Please understand building a product to the price point that also reflects your ethos and also the customer's needs is quite the black magic. The Americans and Europeans were too proud to let go of their ethos. It was only the financial collapse that dried up their cash which made them realise they got to make products that were needed, not what they wanted to sell.

India will always be a buyer's market, and the buyers don't want the riff raff that is considered holy grain in cars - driver's involvement. In fact none of the cars, or car makers, known for their driving dynamics have survived in this country. Heck even the Swift is only a patch on the driving dynamics of the first gen Swift. And that is a succuessful product. So if that product had to change according to the market demands, Ford and their cars don't have much chance.

Unless, Ford realised that and went after the niche, who want the kind of cars they make and are ready to pay a slight premium. Every car maker wants to be a Maruti or Suzuki, they can't be and they shouldn't be. Most of these manufacturers are chasing numbers with products that those numbers don't want. Ford should have either let go of what made it Ford, or accepted they will be number 10 but have loyality like no other. A small product portfolio for a niche segment might have worked better for them.

Lastly cars are beginning to sell like phones. Get new models out quick, or you are done. The days of 10 year life cycle are over. 5 yerars max for a product to look and feel the same. Anything over that and you are losing most of your customers. And both GM and Ford were terrible at that. And they lost. Even the freaking luxury inclined Germans are better at this game than them.


Anywho all this means is that the price of entry for the "Thrill of Driving" club, gets higher and higher.

Originally Posted by vamsi.kona

I am sorry but generalising things without knowing the context and making such sweeping statements doesn't feel correct. Maximum Indians may be buying 3rd grade products because probably that is what they could afford. Who wouldn't want a good product if they can afford. And also just because someone is a member of the forum doesn't mean every one could afford a good product. We don't know what their financial situation is.

I am not an owner of so-called tin can (or probably I am) but I wouldn't demean anyone who purchased them. I still own a Palio Stile SDX from 2008, which doesn't have ABS or Airbags because that's all I could afford at that time and it was far safer than a 2 wheeler. And yes for many Indians, including me, a car is a means of transport, which it basically is. Not everyone is an enthusiast. Will I be looking at a safer car if I were to upgrade now? Absolutely. But would that be a major concern if I were from a normal middle-class family and just upgrading from a 2 wheeler? I am not sure.

The point regarding groceries is also more anecdotal I believe because my experiences suggest otherwise.

Don't take it otherwise, but Palio didn't do well. Fiat is out. For many of the same reasons that the americans are out. The point wasn't that your car didn't have ABS or Airbag, the point was that that people like you who chose from their heart are a rarity. Most of the lot would have chosen a Maruti or Hyundai and that is fundamentally the reason for the failure of a Ford or GM or Fiat. The car companies are not without blame, but there just aren't enough people like you.


AS an aside, my friend has a Palio 1.6. He still refuses to sell it and is parked at home taken care of, only because that 1.6 sounds good, it pulls well and it says Veglia Borletti on the instrument cluster. Mileage and the cost of maintenance be damned. That is the closest he can get to the famous Italian cars of the old. For actual usage he has the Seltos.

[vamsi.kona]

Originally Posted by forty6

Don't take it otherwise, but Palio didn't do well. Fiat is out. For many of the same reasons that the americans are out. The point wasn't that your car didn't have ABS or Airbag, the point was that that people like you who chose from their heart are a rarity. Most of the lot would have chosen a Maruti or Hyundai and that is fundamentally the reason for the failure of a Ford or GM or Fiat. The car companies are not without blame, but there just aren't enough people like you.

Actually the decision to go with Palio was not entirely a decision made purely from Heart. At the time of my purchase, I read many reviews in this very forum and it was more or less a unanimous opinion that Swift was more fun to drive car. And also I kind of liked both Swift as well as Palio. What actually decided Palio was the cost of the vehicle. I was getting the top end model for approx 5.38 Lakhs on road and Swift top end diesel was some 4k to 50k higher IIRC. And Palio also had rear defogger.

My point was more about affordability and the brand image. Maruti and Hyundai could build that brand image over a period of time both with decent products and good service. Others couldn't. If any of the Palio or Punto or Linea had a Maruti or Hyundai badge they would have been amongst the top-selling models. So I don't think it is just the product, as Palio was cheaper than Swift and even slightly better in build, but also the image of the brand, their history with regards to service, etc which make people play safe with their hard-earned money.

[vadakkus]

Originally Posted by AirbusCapt

The hype surrounding India post the 1991 liberalisation was heady. It projected a nation of over 250 million 'middle class' growing at about 8% who had the income levels of mid income countries and who were hungry for a good life. This sounded like the proverbial El Dorado for auto makers from across the world. Their economics and projections were skewed from the begining.
In reality India never had the mid income middle class to begin with. Our actual middle class who could afford American sedans were merely about 20/50 million (a tenth of the projection) and it was not growing. Infact due the silly policies over the last decade this class has at best stagnated of not shrunk. That's why the huge investments in factories didn't pay off. India doesn't love the Maruti 800. It can collectively only afford the Maruti 800. Now that these companies have woken up to the reality, they are in a hurry to pack their bags and leave. It is a sad reality not only in the automotive world, we can see it in almost all sectors be it high end luxury goods, personal devices, business class airlines, star hotels etc. The investment, the actual business and the heady projections just don't add up.

This is the correct answer. In the past two decades, International corporations have discovered that that the Indian market is actually very small. The hype of the early 2000s was just that, hype built up on a bubble of some software companies bodyshopping prowess. They seem to have realised that them making any substantial earning that justifies their time, money and effort spend here is remote. The western markets remain their cash cows, and so they leave. Volvo and Scania are two recent high-profile exits that happened precisely because of this reason.

The average annual income of the average Indian is $2000. Of course, that does not say anything, because we must have a cohort that is wealthy with a minimum disposable income of, say $10000. It is estimated that this crowd is around 70 million strong, or around the population of the UK. If you look closely, you can see that our monthly car sales are somewhere around the same area as that of the UK (in fact we are around 20% higher on average, let us attribute that to false reporting of incomes etc.).
It will sound incredible but India might have matured as a car market. Unless our economic fortunes improve dramatically we might be stuck here for a while. And with a number of policy gaffes and COVID it might be a bit difficult to get those old growth numbers back. And any growth that is happening is only at the top while the middle-class is actually shrinking. So what is going to happen is someone who has a BMW will buy a new Porsche while the Swift guy will decide to keep it for another three years.

What happened differently now is the rise of ultrasuperpowerful AI-driven analysis suites that can predict and project trends far into the future based on a number of complex variables like current scenarios, trajectories and past performance. These "digital crystal balls" can advise corporations on how markets will seem to progress and how much they stand to make on their investments and their future in various scenarios. Today's managements make their decisions based on these projections. And I think what the Swedes and Americans saw is not very rosy.

~vadakkus

[fearless_IN]

Automakers who put India on its priority list and focus can only do better in India. We in India are unique and do not want rejigged products.
Apart from Indian Car Makers, Korean Siblings has achieved success coz of this reason. It is just my opinion.

[Stribog]

Originally Posted by AirbusCapt

The hype surrounding India post the 1991 liberalisation was heady. It projected a nation of over 250 million 'middle class' growing at about 8% who had the income levels of mid income countries and who were hungry for a good life. This sounded like the proverbial El Dorado for auto makers from across the world. Their economics and projections were skewed from the begining.
In reality India never had the mid income middle class to begin with. Our actual middle class who could afford American sedans were merely about 20/50 million (a tenth of the projection) and it was not growing. Infact due the silly policies over the last decade this class has at best stagnated of not shrunk. That's why the huge investments in factories didn't pay off. India doesn't love the Maruti 800. It can collectively only afford the Maruti 800. Now that these companies have woken up to the reality, they are in a hurry to pack their bags and leave. It is a sad reality not only in the automotive world, we can see it in almost all sectors be it high end luxury goods, personal devices, business class airlines, star hotels etc. The investment, the actual business and the heady projections just don't add up.

Indian auto market grew by a CAGR of 15.7% from just 2001-2010. If you consider the 1991 numbers, it grew by a CAGR of close to 30% in the period 1991-2001 to begin with.

Such explosive growth, given the volumes was achieved only by China (the growth of the US auto market was mode graded).

The Indian export market grew by a CAGR of 23% in this same period (01-10)

From 2011-2019 (till when we have data, pre COVID) the auto industry grew by a CAGR of 6%, and is now set for another period of explosive growth till 2030 with papers putting this at about 10%.

In 1991, India manufactured an average of 14,000 cars / month.
In 2019, India manufactured an average of 200,000 cars / month.

In other words, in a period of less than 30 years, we went from producing 140,000 cars per YEAR per annum to 2 Mn.

Did some brands fail miserably? Yes.

Coming to the second part of your comment on how many households can afford expensive American products, the roaring success of the Hector (average ticket price of around 18 L OTR) or Seltos (16L OTR) should tell you that there is a market out there for OEM's willing to appeal to the market.

Tell me, does Ford have any brand in the 15l-29l OTR segment? Where does someone who purchased a 10-12L Ford Fiesta 5 years ago go for an upgrade? To Ford? Or Kia / Hyundai / MG / TaMo?

And the sales charts are also telling. No longer is the entry level Alto the top seller but the Swift or its variants.

Fact of the matter is Ford failed and that is it. Blaming the market, tax policies or even more funnily (not you, but others) the Indian customers is just not being objective imo.

Originally Posted by vadakkus

The average annual income of the average Indian is $2000. Of course, that does not say anything, because we must have a cohort that is wealthy with a minimum disposable income of, say $10000. It is estimated that this crowd is around 70 million strong, or around the population of the UK. If you look closely, you can see that our monthly car sales are somewhere around the same area as that of the UK (in fact we are around 20% higher on average, let us attribute that to false reporting of incomes etc.).
It will sound incredible but India might have matured as a car market. Unless our economic fortunes improve dramatically we might be stuck here for a while. And with a number of policy gaffes and COVID it might be a bit difficult to get those old growth numbers back. And any growth that is happening is only at the top while the middle-class is actually shrinking. So what is going to happen is someone who has a BMW will buy a new Porsche while the Swift guy will decide to keep it for another three years.

What happened differently now is the rise of ultrasuperpowerful AI-driven analysis suites that can predict and project trends far into the future based on a number of complex variables like current scenarios, trajectories and past performance. These "digital crystal balls" can advise corporations on how markets will seem to progress and how much they stand to make on their investments and their future in various scenarios. Today's managements make their decisions based on these projections. And I think what the Swedes and Americans saw is not very rosy.

~vadakkus

So why are the Japanese, Chinese, Koreans etc pouring in the mega bucks? Or even the VAG group? And why are the Americans so bad in the auto making game that they ceded the top 2 spots within a few decades to the Japanese and Europeans?

[Kosfactor]

Originally Posted by vamsi.kona

If any of the Palio or Punto or Linea had a Maruti or Hyundai badge they would have been amongst the top-selling models. So I don't think it is just the product, as Palio was cheaper than Swift and even slightly better in build, but also the image of the brand, their history with regards to service, etc which make people play safe with their hard-earned money.

I doubt it, those Fiats were poorly made. The electrical system will fail, the cooling system will fail, the clutch will fail , the suspension will fail - there was really very few upsides to it and then you need to consider where to buy it and service the vehicles from - Tata!! Fiat did a lousy job from start to finish.

[ac 427]

Having worked with GM closely I can harbour a guess or two here

1. Horrible work environment: I have worked with German car brands, Japs as well but the worse work culture is in these US based companies. No wonder that Chevy went belly up

1. old business models: most American car makers are in the business of buying carlines from different brands, badging them as their own and selling those cars. (Daewoo became an Chevy, Holden). They tried the same in India and they failed miserably.

1. understanding the markets: it is surprising that American companies that are generally great marketeers, have failed to understand the Indian market and have.come up with truly atrocious work. Razzies level work. The never understood that cars in India were not used like FMCG/FMCD.

1. Product lines: This might be an offshoot of the 1st point, but American cars have been horrible in India - with the exception of the Escort (which sold well), EcoSport (which is an old horse now).

1. Price points: American car companies have always been in a few price points, but were never truly available in all points unlike the Japs, or even European companies.

Cheers,
AC

[kiku007]

TL;DR version: It's not worth their time and effort.

If you really want to know more about American carmakers then I'd suggest reading the following books,

Iacocca: An Autobiography

Once Upon a Car: The Fall and Resurrection of America's Big Three Automakers--GM, Ford, and Chrysler

American Icon: Alan Mulally and the Fight to Save Ford Motor Company

The American Big-three have had theirs highs and lows and at times they had to fight for survival or leadership in their own homeland. If you read their history then you'll understand the reality that the Indian market is literally a tiny spec in their eyes.

Also I'd like to ask what was American about Ford and GM's products in India?
The Escort, Mondeo, Ikon, Fiesta, Figo have their roots in Ford Europe, South Africa or Brazil. The Endeavour has it's routes in south-east Asia/Australia.

GM offered Opel from Europe. Later Chevrolet India offered badge engineered Korean and Chinese (?) cars.

FCA is probably the only one actually selling American cars in India I guess.

It's pretty obvious that there's no synergies between the American and Indian car market.

[Emvi]

Lackadaisical approach at dealership level by a few American and European brands makes me believe that they are more export market oriented and care less about the local market. I myself have experienced this more than a couple of times and I know of people who have similar experiences to share.

One of my posts from a different thread depicting one such dealership experience-
https://www.team-bhp.com/forum/india...ml#post5019775 (Renault Kiger Crossover launched at Rs. 5.45 lakh. EDIT: Driving report on page 19)

Take for example, Chevrolet Tavera and Spark. People who have used and owned Tavera, still swear by its name. Chevy for some reason lost interest in the product and paved the way for its slow death. IIRC, back in 2008 I was in the market for a small hatch. Spark was in consideration and one fine day I saw an advertisement in a newspaper which read- Call ### a for testdrive at your doorstep. I called the number and booked an appointment for that afternoon. The dealership in question was Kropex Chevrolet, Bangalore. I am still waiting for the test drive vehicle . Yes, they were 'prompt' enough to call me back to know if I was still interested in the car? When? Almost 18 months later and by that time I had already bought an Alto and the car had run almost 10000 Kms!

I have another such incident to narrate. This time it was at Frontline Automobiles, Mangalore. Had been to the showroom to checkout the then newly launched Chevy Sail(sedan). There were about 5-6 young lads and ladies(sales executives) sitting pretty at their designated desks. They were so busy chit-chatting that not a single executive seemed to have even a smidgen of interest in attending a prospective customer. I walked out unattended after checking out the car myself. I did make it a point to call GM customer care and complain, knowing very well that it wouldn't matter a great deal to them. And I wasn't wrong.