A recent stay in India has enabled me to get a much better understanding of the Indian new car market and its dynamics which have very unique characteristics. Understanding India is essential in today’s worldwide automotive scene – a lot of the innovation taking place here will soon be applied to other developing markets (like Africa).
Ford dropped a
heavy light weight military-grade aluminum gauntlet with a metallic thud when they announced that the aluminum-intensive F-150. With up to 97% of the body being made of aluminum, and with Ford’s claims that it has dropped 700 pounds off the truck’s curb weight, the industry took notice. So much so, that GM announced their plans for an aluminum Chevrolet Silverado and GMC Sierra shortly after the North American International Autoshow, where the F150 was debuted.
According to WardsAuto reported that some analysts are not quite as impressed, and are unsure whether or not it will make as large of an impact as expected.
Launching the “world’s cheapest car,” the Nano, into one of the world’s fastest growing auto markets, India, looked like a surefire concept back in 2009. Today, it looks stupid. Like many surefire concepts, the Nano turned out to be a dud. Says India’ Economic Times:
“After several years of disappointing sales, it has now become clear that the snubnosed hatchback’s unique selling point — its price — was actually a commercial sticking point. (Read More…)
Tata’s Nano was launched with much fanfare in 2009, as the world’s cheapest car and a symbol of India’s automotive and economic aspirations. But first Tata had problems with its factory, which was to be built on land [allegedly] stolen from local farmers. Then, early last year, the cars started catching fire and refused to stop. Then finance was the issue, and when Tata revamped its finance, advertising and retail presence, it looked like things were beginning to improve. It turns out the bump was short-lived. After hitting 5k monthly sales last December, volume has fallen again dropping to 3,260 units in July (1/8th the volume of its main rival the Maruti Suzuki Alto) according to indiancarsbikes.in, which reckons
Startlingly, the most fuel efficient petrol car in the country, which is the most inexpensive too isn’t finding takers in a market troubled by high petrol prices and rising loan interest rates, that is clearly favoring cheaper and more fuel efficient cars… the market isn’t biting and the Nano sales have begun the downward spiral, this time continually.
So, what’s Tata going to fix to get its attempt at “India’s Model T” back off the ground. How about “everything”?
Emboldened Tata has announced new plans to export their Nano. To markets such as Thailand, Sri Lanka and Bangladesh. And Tata will do that carefully. “We will go after these markets one after another,” Tata CEO Carl-Peter Forster told Bloomberg at an industry event in Bochum, Germany. Gone are bravado and hype. No more mentions to export the $3,000 car to Europe or god forbid the U.S.A. (Read More…)
Tata is doing everything possible to revive the shriveled sales of the Nano. Sales of the ultra-lowpriced Nano recently crashed to ultralow levels: In November, only 509 units changed hands, reluctantly. The success of the much hyped diminutive conveyance more and more looks like a flash in the pan, literally. The Nano became infamous for going up on flames. Then, Tata had to raise the ultralow price a few times. On top of that, Nano buyers were seen as bad credit risks by Indian banks and were hit with ultrahigh interest rates. Stir, simmer, and you have a recipe for disaster. Now, Tata has decided to fight back. However, the counter-offensive appears less inspired compared to the enthusiasm when the car was launched. (Read More…)
Bloomberg reports that the world’s cheapest car, the Tata Nano has seen its sales drop from the point where it had to hold a lottery to choose buyers for its first 100k units to last month’s all-time low of only 509 units sold. Tata has raised the price twice this year, bumping the MSRP by 4 percent in July and then adding another $200 to the price in October. This, in addition to the Nano’s fire-related issues and the inability of Indian consumers to secure financing for the microcar is being blamed for the sales drop. Says Mahantesh Sabarad, an analyst with Fortune Equity Brokers (India) Ltd:
The product has had a difficult time in terms of its perception ever since those fire incidents came in. A lot of people bought the car in the initial sales period for its novelty factor and didn’t go for loans
Tata’s response: hire more sales staff and work with banks to secure loans for Nano customers. After all, the Indian automaker has 250k annual production capacity assigned to the Nano, so sales had better start picking up soon.
The Tata Nano was seen as the car which will set the Indian car market on fire. Unfortunately, it seems it’ll also roast its owners. (Read More…)
Tata reiterated its threat to invest the the U.S. and Europe with their bargain-basement Nano car. At an event held today in Toyko, Tata’s Vice Chairman Ravi Kant said that “Tata Motors now plans to take it forward to the developed markets in Europe and in the U.S.,” The Nikkei [sub] reports. “Now plans?” (Read More…)
At the Beijing Auto Show, Geely had a whacko two-seater, gullwing adorned concept car on display. I didn’t deem in worthy of mention, along with the hundreds of other whacko concepts. I didn’t even snap a picture. I wish I did. If Chinese media is not mistaken, I missed taking a picture of the world’s cheapest car, cheaper than the Tata Nano. (Read More…)
Japan’s Mag-X [via Autoten] brings us this rendering of a Toyota low-cost car, said to be planned for a 2012 launch in India’s hot-hot entry-level car market. Expected to weigh about 1,322 lbs, Toyota’s Tata Nano-fighter is said to have an 800cc two-cylinder engine mounted out back (alá Nano).
Pictures are supposed to be worth a thousand words, but this one is good for at least two whole life lessons. First: you get what you pay for. If you buy the world’s cheapest car, as insurance agent Satish Sawant did, it might just burst into flames on the drive home from the dealership. Second: Google Adsense has no sense of irony.
Last week was an eventful one for Tata Motors. First, Daimler announced that it had completed selling off its 5.34% stake in the Indian automaker, for USD $422 million. Investors including Citibank and Tata Sons, the largest current Tata Motors stockholder, acquired the shares. Daimler explained the move by saying that it is now well enough established in India in terms of passenger and commercial vehicles, to no longer need an equity share in a local company. Daimler already builds CVs in Pune and its new CV plant in Chennai will go online in 2012. Daimler and Tata have a relationship that dates to 1954, when Tata started assembling Mercedes-Benz trucks. The two companies started local assembly of M-B cars in 1994 under the Telco joint venture.
Hyundai are on fire at the moment. They’re posting good profits at a time of economic instability, their quality & reliability is winning them awards and customers like what they see in their showrooms. However, that magic formula seems to be losing its lustre elsewhere in the world. The Hindu Business Line reports that Tata Motors have snatched number 2 position from Hyundai in the Indian market. Sucks to be third! (Read More…)