[CliffHanger]

Originally Posted by Shreyans_Jain

Kia is not the right example to give.

MG is another example, to have started from scratch. Not sure what you meant by having deep pockets, it's not that Ford, Chevy, Harley, etc. have empty pockets. Also not sure why we contempt the Chinese. They are our neighbors and I'm happy they are doing well. I don't love them, neither I despise them. I don't like their aggression in our borders either. But unlike our other neighbors, they don't send us terrorists.

Back to topic - there is another excellent thread running currently on how we are going to make the planet sustainable. I think that should be the thought process for the present generations and future generations. We should focus on recyclable homes and better mode of transport than cars. EVs are not the answer. This video popped up today, see how those plenty of big rotting cars are lined across all the streets. Do you want it in our country?

Considering our land size and population density, Small cars are perfectly fine for India as we evolve to more efficient modes of transportation.

https://youtu.be/HxHLTlDY3tk

[dust-n-bones]

Originally Posted by shancz

But I don't think its a loss for us, just how our market is and its the same for everyone with some having the benefit of remaining longer in the game but it's the same everywhere else.

I agree with your post, but not this .
By chasing away competition, we are inviting the Fiat/Ambassador/Chetak era again. It may not be apparent looking at TML/Mahindra for now, but thats just the way markets work.

Originally Posted by rsidd

Interesting graph but I see it as a good thing. You would not know, looking at the choked roads in cities, that Indians are not buying so many cars. Cars are bad for the environment, period.

Well this is sort of OT, given we are discussing 'why are automakers struggling'. Let me just say that the problems in the automotive industry are unlikely to be due to any environmental awakening on the part of the buying public, policymakers or automakers.

Originally Posted by CliffHanger

There is nothing wrong with India or Indian beauracracy. If a new entrant like Kia can succeed and an old timer like Tata can reemerge, any other manufacturer can succeed.

Do you not think our policies in many industries are made to serve interests of the favoured few? Like the sub-4m rule - does it not give an unfair advantage to Suzuki with no benefit to the consumer? You can likewise pick many examples across industries.

Then our sarkar has a 'mai bhi superpower' complex. For an industry that creates industrial hubs (translation: more jobs than any comparable investment), we keep taxing it exorbitantly, keep throwing policies like BS6 and '6 airbags' without consultation, 'Make in India', 'No Chinese Tesla' and god knows what else.

What to talk of our legendary red-tape, corruption (we are 85th in the last transparency international ratings), and judicial system.

If only our governments (leaders and bureaucracy) can show a little humility in acknowledging that they generally do more harm than good with their 'good intentions', that they may sometimes not 'know-it-all' - consultation is not such a bad idea - and that when an automaker leaves, its going to leave the industry, consumers, workers, and India's investment climate poorer for the long term.

[shancz]

Originally Posted by dust-n-bones

By chasing away competition, we are inviting the Fiat/Ambassador/Chetak era again. It may not be apparent looking at TML/Mahindra for now, but thats just the way markets work.

You have a point but I think we cannot go back to that era ever again. IMO we have evolved out of it.

My point was in the context of brands not adapting to the changed realities from the markets they've operated in. I would have liked Ford to exist and do well but if they launch a good car and just continue with facelifts for 8-10 years without addressing the feedbacks raised, I don't mind that they have to pack up and leave.

I find it hard to believe that a brands like Ford and GM cannot build good cars for a market if they go all cylinders firing but that seemed lacking. They seemed to have a general developing markets strategy instead of a country specific one and hence the results.

Like mentioned earlier by anjan_c2007 the ridiculous sub 4m rule should go. It is dragging down the market.

Agree with your post through. Good points

[Kosfactor]

Originally Posted by CliffHanger

Back to topic - there is another excellent thread running currently on how we are going to make the planet sustainable. I think that should be the thought process for the present generations and future generations. We should focus on recyclable homes and better mode of transport than cars. EVs are not the answer. This video popped up today, see how those plenty of big rotting cars are lined across all the streets. Do you want it in our country?

Considering our land size and population density, Small cars are perfectly fine for India as we evolve to more efficient modes of transportation.

You are in good hands then, our country is doing great that way.

Small cars form bulk of the sales if you consider sub4M as small car territory. If you are talking about cars that are even smaller, well they are useless as our population can afford only one car at a time and it has to be minimum alto800 size. So we are very much sustainable in terms of cars, it's mostly bare minimum car that people are buying, they hardly use any fuel too.

You cannot have a car and then tell others to take a walk in the name of planet's sustainability as is the case with developed countries who destroyed everything they touched and now wants us to save our tigers - which they shot and killed for fun in the first place, don't fall for their media please, they have zero credibility.

Now about abandoned cars on our street - hmm, Americans are very wasteful and Indians are far more resourceful - it could be an aspect of our economies but you get the picture. The time most Indians buy disposable European luxury cars we can expect our street to be full of those. You don't need to worry about that in your life time though.

[Turbanator]

Originally Posted by prajwalmr62

The problem no one sees is the stagnant middle class incomes.

* If you are buying a car worth 6L with lowest tax bracket (28% GST with 1% cess) then total taxes (GST + road tax) would be approx 2L. A car manufacturing company gets approx. 4L. This sounds bad when you go up the tax bracket (taxes are levied up to 48% GST).

Please also add 30% Income tax that most salaried people pay

[prajwalmr62]

Originally Posted by Turbanator

Please also add 30% Income tax that most salaried people pay

I prefer to forget the Income tax, it is less painful that way.

Also, it is 30% + 4% cess, to technically 31.2%

[Skorp_Knight]

Ford and GM were unsuccessful because of their own mistakes. GM had successful products in Spark and beat, and their Cruze sold in respectful numbers despite facing newer competition, but they never cared to bring able successors to any of these products.

Ditto with Ford, we all know Ecosport as a trailblazer in the compact SUV space, but it went on and on without a proper new generation update despite losing sales to newer, stiffer competition. Endeavour challenged Fortuner reasonably well, but Ford were just clueless as to what they should bring below it to harp the brand pull.

To be honest, Ford had better chances of success than Nissan-Renault or VW-Skoda do even today, had they brought a good product between Ecosport and Endeavour, but they really weren't interested in business here due to their new global policies. There's no doubt that Indian market is hard to crack, but Kia and Tata did it too by offering competitive products. It truly hurts to see a Ford or a Chevy on the road today knowing they'll be the last ones to be offered here but moving on from this situation is the best one can do. Unless you are Honda, as you should be truly worried about your next products' success.

[techmotor]

The key factors for these companies to exit India, based on my understanding, is because of one or more of the following reasons.

1. They got the fundamentals wrong, that is understanding the market and offering products accordingly and to keep introducing new models after enough facelifts have been done. Not to mention the marketing and after sales service.
2. They have been steadfast about the strategy and/or principles just because it worked in some other regions.
3. Issues in parent company leading to elimination of least priority or low revenue turn around markets.

Ford for example introduced an excellent product (Ecosport) that succeeded worldwide and that was it. Sitting on the success of that for over a decade and not introducing other models which were otherwise available in other asian regions. Regarding the new Figo twins, they haven’t done anything to distinguish or compete with other cars from the segment. The Ford DNA(driving dynamics) was the major thing going for it mainly because those were based on Fiesta platform. I always loved Ford cars and was really heartbroken to see them leaving.
Chevrolet on the other hand was a confused deal altogether not to mention the corporate level issues like bankruptcy, selling assets etc. There was the Beat which offered a unique styling in compact package with an underpowered engine. They didn’t bother much to address it’s shortcomings which led the sales to drop significantly after the initial pull. Then there was optra magnum which was said to be the test bed for Cruze(not sure how much of it is true) with an engine that provided an exhilarating performance with plenty of torque. The engine definitely deserved a better chassis, not that it was bad. Finally it made it way to Cruze but it didn’t do too many numbers. A very heavy clutch and turbo lag (stark contrast from optra) hindered the driving experience. The car was a looker though and the torque came in upper bands meaning you need a straight road to get the torque kicking in post which it becomes a rocket. For an MUV/SUV, they had Tavera and Trailblazer but these segments were owned by Tata, Mahindra, Toyota and Honda which provided much better offerings.

[landcruiser123]

Anyone can point fingers at protectionist policies and high taxes, but the real reason is not being able to keep up with the ever changing customer expectations.

Many brands rested on their laurels and that is it! They needed an updated product lineup for changing customer preferences. Can you think of why Honda (city/civic), Mitsubishi (lancer/cedia/pajero), Renault(logan/duster), Ford(ikon/fiesta.... followed by the ecoport), GM(Optra/Cruze), Nissan(Micra/Sunny) etc have not had continued success? The only reason is they didn't update their product lineup.


Sure, Indian customers are hard to please, but didn't Kia(start successfully), Tata(make a grand comeback) or Mahindra(sell the expensive XUV 500/700 and Thar)? Hyundai was competing on price with Maruti at one point. But they graduated from only [Santros] to [i10/Verna/i20] around the 2010s. From there, they have now graduated to more expensive [Venue/Creta] since the mid 2010s.

Toyota has arm-twisted Suzuki to stay relevant in India

[shancz]

Originally Posted by landcruiser123

Anyone can point fingers at protectionist policies and high taxes, but the real reason is not being able to keep up with the ever changing customer expectations.

Excellent points and I second that with real life experience.

I like the S-Cross and not a fan of the gizmo laden Kias and we can discuss as enthusiasts that whether the 4AT on the S-Cross is ancient but adequate.
I was suggesting the S-Cross and explaining how it was a good car that price point, quick came the reply "have you looked at the Seltos ? Have you seen the interiors? how smooth it drives ?".

These very basic questions indicate how the buyers think and rightly so to which anyone carrying a 5+ year old model won't have an answer to.
Also worth noting that buyers around the 15 lakh price range have really flexible budgets. I have seen countless examples of people aiming for the 13-15 lakh band and ending up with 20+ lakh cars whether its the top Creta/Seltos or Kushaq/Taigun or the Harrier/Safari. Not including the 700 since the waiting times have proven to be the biggest turn off.

I used to think that how can someone pay 12-14 lakhs for the i20 until I experienced it myself, that uplifting feeling it oozes is what people are paying for.

My takeaway :
Buyers of today are looking for a car of tomorrow.

[GTO]

As a customer & an enthusiast, I don't like how 2 companies (Maruti & Hyundai-Kia) control ~70 percent of the market. Throw in Tata & Mahindra, and you have 4 groups controlling 85 - 90% of the car market. That leaves all the other MNCs fighting for scraps, just 10 - 15% of remaining customers.

This greatly restricts choice and for those MNC makers, it becomes a big struggle. They either exit (Ford, GM), pull back on their aggression (VW) or put India on the backburner. A lot of them become 1 - 2 product wonders (Nissan), and it's hard to ask Global HQ for more investments when your market-share is less than 2%.

I wish we had a market where 8 players had 80% of the market. That would lead to far greater competition & choices for us.

See the USA. Only two players have 15% (source). What's more, the market size is so huge that even 2% market share means volumes big enough for multiple products & profits:

[Mafia]

Originally Posted by DicKy

Mazda for me, but we can expect some random Chinese car company to sell here in India, than Subaru or Mazda entering the market. Both Subaru and Mazda still have majority of their manufacturing in Japan itself, more so for Subaru. Also the appeal for rugged AWD vehicles( read not SUVs) in case of Subaru and near premium driver focussed Mazda approaches don't really fly with the Indian market demands.

Btw, Subaru is now more of a Toyota company than GM. GM had already sold its stake to Toyota.

A new entrant in the market now has to really slog it out with the established players. Even after 15+ years Nissan is still struggling and would have been out without the Magnite.

The Mazda portfolio has beautifully designed cars and SUV's that are large format and in India the size game is just reaching a mid-size level of the global market.

With the EV transition on the horizon no automaker wants invest heavily into a new product that will be outdated in 10 years.

It is not looking great for the Indian auto market in terms of new players entering with IC cars.

[Raghu M]

We always feel we lost great brands. Why not think the great brands lost India. You shared the nos., India is one of the most sought after markets now. If a brand doesn't survive, we blame it on bureaucracy, land prices and even demonetization (I mean seriously?). Let's take a step back and see what great products were offered by these so called great brands (hardly great IMO).

Chevy - I don't see a vehicle other than Tavera on Indian roads now (or I see them depleting too). You can very well imagine what great products were released in India by this brand

Ford - EcoSport and EcoSport and EcoSport and _________. No offence meant to anyone but what was Ford even thinking? Doesn't the company have any responsibility towards it's employees or vendors? Why is it that the customer has to save companies that don't even know what should be in the market?

HD - Let's admit it, India is not a market for super bikes and nor will it ever be. Given the Indian mentality (which is more mature than the Western thought process), no middle class earning member will pour in 8L to 10L on a super bike, instead they will keep their family happy by buying a reasonably good car in that price bracket. So, who is at fault here? Definitely the brand. They need to do proper homework before setting foot in any offshore lands.

On the contrary, BMW, Merc and Audi are doing reasonably well. I don't see what difficulties Ford saw that the big brands did not see!

I think all the global brands take India very lightly. Achieving success in western world doesn't entitle them to be great brands. Surviving in India is the acid test for all these brands. I am surprised that no one mentioned about Apple. It's a huge brand overseas, but it is not no.1 in India.

Brands need to look at economies of large scale. That is the reason you can't beat Maruti easily. Hyundai and Kia are Asian brands, hence they have better understanding of the Indian customer and obviously are doing impressively. M&M, TATA will survive and keep throwing up surprises, they have the advantage of long run in the market.

So, let's stop fussing about global brands leaving India, they don't deserve to be here if they are not making profits. Elon Musk is no automobile guru to rule every market he steps in. Tesla may be good but if they only want to dump Chinese manufactured cars in the country, the government should not encourage them. If the land prices are high, so are the car prices. That is a different topic altogether. The govt. should give local brands like TATA the first entry advantage in the EV segment.

We all talk of Make in India, this is a good way to kick things off. Let the local players be given a chance to make EVs with good subsidies and infrastructure. If a foreign player wants a pie of the market share, they need to set shop here and manufacture. They need to create jobs here. That's what every developing economy needs.

[Raghu M]

Originally Posted by shancz

Excellent points and I second that with real life experience.

I like the S-Cross and not a fan of the gizmo laden Kias and we can discuss as enthusiasts that whether the 4AT on the S-Cross is ancient but adequate.
I was suggesting the S-Cross and explaining how it was a good car that price point, quick came the reply "have you looked at the Seltos ? Have you seen the interiors? how smooth it drives ?".

These very basic questions indicate how the buyers think and rightly so to which anyone carrying a 5+ year old model won't have an answer to.
Also worth noting that buyers around the 15 lakh price range have really flexible budgets. I have seen countless examples of people aiming for the 13-15 lakh band and ending up with 20+ lakh cars whether its the top Creta/Seltos or Kushaq/Taigun or the Harrier/Safari. Not including the 700 since the waiting times have proven to be the biggest turn off.

I used to think that how can someone pay 12-14 lakhs for the i20 until I experienced it myself, that uplifting feeling it oozes is what people are paying for.

My takeaway :
Buyers of today are looking for a car of tomorrow.

Exactly my thoughts. The global brands are not looking at tomorrow. Why can't Toyota, Ford or any other brand bring their best brands to India. They will not, and they expect the customers to throw a red carpet for them. Well that's definitely not happening. I think with Ford's exit, the global brands should take a look at India more seriously. One wrong step, and you won't feature in the competition anywhere!

[Mr.Ogre]

I don't think it is fair to blame India. Every country has its challenges - while some manufacturers thrive some fail. It is the same story in most of the countries. Here in Australia too manufacturers stopped manufacturing when they found cheaper alternatives.

GM/Holden even shut down its sales operations, considering they were one of the biggest players. Holden kept manufacturing as long as Australian Government was subsidising them. Honda is struggling here too and not many will be surprised if they leave. Hyundai and Kia as in India are thriving here. Toyota is doing very good here and in India too they formed an alliance with Maruti that makes them relevant. Ford is hanging on thanks to its CSUVs, SUVs and Utes. HD is struggling globally to stay relevant. UM not many have heard about them in fact it has been in the news for all the wrong reasons.

I think there is a common thread. When businesses fail to adapt or when the management lacks vision and courage they fail it is irrespective of the country.