Automotive Soliloquy

Force ForceOne a little too late for the Indian market

2012-05-13T14:39:00.000+05:30

A body-on-ladder frame boxy SUV from an Indian commercial vehicle maker Force Motors, the ForceOne was launched in October 2011. It was a product aimed at the conspicuous gap in the Indian SUV market, between the INR 800,000 (US$ 16,000) Mahindra Scorpio and the INR 1,800,000 (US$ 36,000) Ford Endeavour. Priced at INR 1,100,000 (US$ 22,000), the ForceOne should have been an instant winner in the fastest growing passenger vehicle segment in India - SUVs (Business Standard Motoring - ForceOne review). The SUV also boasts of the Daimler OM651 diesel engine which once powered the Mercedes-Benz C 220 CDI and E 220 CDI. Force Motors planned to sell ~4,000 units of the ForceOne between its October 2011 launch and September 2012. It has sold only 1,200 units until March 2012 and I have seen exactly ONE ForceOne on the road since its launch.

So what went wrong for this SUV?

Timing.

Before the ForceOne was launched, Tata Motors already had the Aria, a multi-utility vehicle (MUV), in the offering at the same price point. The Aria is fully loaded with safety and creature-comfort features, such as ABS, traction control, rain sensing wipers, touch screen infotainment console - everything. It still did not do well because of its price and well, because it was neither a car nor an SUV. Moreover, a couple of months after the ForceOne's launch, Mahindra came up with its XUV-5oo SUV - again at the same price point as the ForceOne's. The XUV-5oo scored over the ForceOne mainly in terms of looks - the XUV-5oo's looks are far more contemporary than the ForceOne's; and ride quality and handling, primarily because the XUV-5oo has a monocoque chassis (Business Standard Motoring - ForceOne and XUV-5oo comparo).

All the 'drawbacks' that the ForceOne has in comparison to the other products available in the market are just functions of timing. Indian consumers have accepted uglier cars, for example, the Mahindra Xylo and inferior quality cars, the Tata Sumo. However, in the present market scenario, the Indian consumer has much better choices for INR 1,100,000. If the ForceOne would have been launched, say, 5 years earlier and INR 400,000 cheaper, it had the potential of redefining the Indian SUV market. However, with the announched launches of the Renault Duster and the Ford EcoSport by end-2012, the fate of the ForceOne seems to have been sealed.

Although, I will definitely look out for the 2013 Gurkha!

The Fiat 500 is not a chick car!

2012-05-09T19:33:00.001+05:30

It is funny how at times celebrity endorsements have the opposite impact on product popularity. Recently, I stumbled upon the Jennifer Lopez Fiat 500 campaign in the US (Official Fiat 500 video - Youtube). While there is nothing wrong in J Lo trying to bring back an iconic car to life, that too in a market where it never had any presence to start with, I still could not help but wonder why the Fiat guys could not get hold of a better brand ambassador for the cute little car.

As I started reading and looking for consumer responses to this particular campaign, I was not surprised. Most of the people, especially the ones aware of the Fiat brand and the 500, were not at all entertained. Simply because there is no relation between J Lo and the 500. Also the fact that J Lo is not a certified auto freak did not help either. For the purists, the whole campaign was 'tasteless.' Further, it is rumored that J Lo used a body double for the scene in the commercial when she zips around her 'block' in the Bronx and that she fumbled as she tried to open the car’s door in a live television appearance during the American Music Awards (NY Times). These 'misadventures' did not go too well with the audience. Neither, could J Lo convince the auto enthusiasts, nor could she convey the message that she still is 'Jenny from the block' and she loves driving the cute and maneuverable 500. In fact, Laura Soave, the Head of the Fiat brand in North America, lost her 20-month-old job especially due to the J Lo-500 campaign.

However, the ad campaign cannot be totally brushed aside. It did attract attention, although not from the intended target, but from teenagers and younger consumers who have no idea about the past antecedents of the 500. The campaign went a long way in branding the 500 as an essentially women's car. As a damage control mode, Fiat has now roped in Charlie Sheen for the 500 Abarth (the souped up version of 500) campaign (Youtube). I am still not sure whether an aging womanizer saying "Not all bad boys are created equal" will woo the potential 500 buyers.

Finally, Fiat seems to be getting it right with the Let your Italian out campaign. In fact, current Fiat owners and Fiat enthusiasts seem to have given the thumbs up to this advertisement (Fiat500owners.com). Hopefully, Fiat should be able to reach its ~5,000 a month sales figure for the 500 now.

Moving on to my home market, India, Fiat chose the former miss-Universe Lara Dutta as a brand ambassador for the 500. Now, I do respect this lady for her beauty and intellect, but somehow she just does not seem to be the right representative for the car. Earlier, the Palio was endorsed by cricketing legend Sachin Tendulkar. And Sachin autographed bright yellow Palios were quite common in the market - meaning the campaign was a success. However, I cannot say the same for the 500, which was introduced in the Indian market in 2008. There have not been much buzz about the 500 in the Indian market (mostly due to its ostentatious pricing) and I seriously doubt that the 500 will be branded as the rich lady's toy car with the present brand ambassador. Could not have Fiat roped in auto enthusiast Sanjay Dutt to be the brand ambassador instead?

Happy 2012!

2012-01-03T21:02:00.000+05:30

Warm New Year wishes to you all! I hope that this year brings a lot of peace and happiness in your lives and sees your dreams come true.

Also, let us hope that we see a lot of action in the automotive industry this year in terms of new technology, models, better fuel efficiency and safer cars.

Electric vehicles in India

2011-12-06T13:53:00.001+05:30

Any topic on electric vehicles (EVs) in India would invariably veer (at least for now) toward the Reva, by the Mahindra and Mahindra and Maini group joint-venture (Mahindra Reva Electric Vehicles Private Limited). Founded in 1994 by Sudarshan Maini and based in Bangalore, the Reva Electric Car Company, is involved in designing and manufacturing of compact EVs. In fact, the Reva (the present generation called the REVAi) is the largest selling EV in the world, not because of its range (80 kilometer) or its looks, but simply because of its price. The Reva (priced at approximately US$7,000) is five to 142 times cheaper than the Nissan Leaf and the Tesla Roadster, respectively!

Anyway, this write-up is not about the Reva, but to take the Reva as an example and try and discuss the ‘plight’ of EVs in India.

I have stayed in Bangalore for about four years before moving up north to the Delhi NCR. During my stay in Bangalore, the Reva was a pretty common sight, and I would see at least one of those EVs on my way to office or back. However, in the national capital region, I have failed to spot a single Reva in the one and a half years that I have been here. This made me ponder about this disparity, because Delhi and its satellite townships are a fair representation on the automotive scene in India.

I was fairly surprised and began thinking about why there is this divide in accepting an EV across different cities. And also on the fact that if there were to be more EVs in India, would there be a difference in mass acceptance, based on demographics, customer taste and infrastructure availability, or rather the lack of it.

Here is what I figured out:

Infrastructure: In Delhi, people fight for parking space. They get physically violent and at times your car is parked more than 300 meters from where you stay. In Bangalore, people usually have verbal altercations and generally mange to park their cars where they can see it. In some places in Delhi, the lanes are so narrow that it is almost impossible to park your car next to your house without causing an impediment to traffic. So, keeping an EV in Delhi can be quite a task, because recharging it would be a nightmare. Even office parking slots do not provide charging points for EVs. Essentially, it is much more practical to own and operate an EV in Bangalore, compared to Delhi.

Also, after sales and service for the Reva is negligible, if not altogether absent. As a consumer, everybody expects their car to be taken care of in an authorised service station for at least three years post-purchase. Mahindra and Reva need to increase the number of after sales service centers for people to feel comfortable buying their product. In fact, both Mahindra and Reva need to leverage the Mahindra service network and consciously draw consumers’ attention to the fact that the Mahindra network is there to support Reva consumers.

Power scenario: In the satellite townships of Delhi, such as Gurgaon, power supply is very erratic. Power-cuts last up to eight hours at a stretch, and eight-hour-long power-cuts are not one-off incidents, they happen on a weekly basis. So, if you are in Gurgaon, even if you could park your EV in your living room, you still would not be able to recharge its batteries. Comparatively, Bangalore has fewer power-cuts and they generally do not last more than an hour. Also, electricity is far dearer in the NCR region – it could go up to INR7 per unit at places.
Customer taste and requirement: This is a very subjective factor and it holds true not only for EVs, but all automobiles in general. For instance, you will see more white cars up north and more black cars down south. Indian consumers have different preferences for different colors in different regions. Coming back to EVs, no doubt the Reva back-up as the second car in all households in Bangalore, but in Delhi, the second car would be a Chevrolet Beat, or even a Tata Nano, but never a Reva. Quite possibly, because of the other factors I mentioned that go against the Reva, but also possibly because the Reva, is not up to the taste of consumers in the North. Bigger cars still hold an appeal up North. (You might want to argue about the Nano in the previous sentence; but the Nano is much roomier and has a sense of pride in ownership due to all the news it generated and because it is from Tata)
Government initiative: It is a known fact that new technology cannot find mass-acceptance without government support. True that the Indian government has started, or at least given thought, to providing subsidies for EV and alternate powertrain suppliers and manufacturers. That is the first step and not sufficient enough to drive EV acceptance in India. Consumers should also benefit for choosing lesser polluting vehicles. Also, state governments should do away with taxes and levies on selling EVs. This will bring a price uniformity for EVs across states.

Therefore, I think that for EVs to be successful in India, we need to consider different markets (read cities) as unique and offer different solutions for the mass acceptance of the EV. A solution for the success of EVs in Pune, will not work in Chennai. India needs to be segregated on the basis of the different parameters mentioned above. However, on a national level, the issues of power and infrastructure shortage, state government encouragement, and the likes will still act against the interest of EVs. For that matter, pure-play EVs might not be the solution to clean transportation in India at all. Maybe, we need to replicate the success of CNG buses in the passenger vehicle domain, or maybe, we need to think of more indigenous alternate fuels, such as biogas. In fact, cheaper, cleaner and efficient last-mile connectivity could become a panacea for traffic congestion and vehicle pollution in India. We could, in theory, bypass the trials of alternate powertrain and be an example in efficient public transportation solutions, just like we bypassed the muscle car era and hopped straight on to compact cars, which are only beginning to make their mark in older and more mature automotive markets.

About time Honda India pulls up it socks

2011-06-15T22:58:00.000+05:30

The other day I was thinking about Honda India's strategy, or rather the lack of it. Today I read in the Wall Street Journal and the Times of India that Honda has cut the price of its entry level sedan, the City by 4-8 percent. This will bring down the price of the City by at least INR44,000 from the present price of INR749,000 (ex-showroom price for the base model in New Delhi). A rather delayed reaction to present automotive market dynamics in India, but a very welcome one, nonetheless.

Although not as big as its Japanese brethren -- Toyota and Nissan -- Honda enjoyed a first-movers advantage in the Indian automotive market during the mid-90s, and has since then earned an enviable brand recall as a maker of quality and reliable cars. During the same time, other global OEMs such as GM, Ford, Hyundai and Renault too were trying to grab a share of the gradually growing Indian passenger vehicle market pie. The Americans and the French failed mostly due to outdated products and wrong calculations of the market pulse. The Koreans, due to the right product -- a feature rich hatchback, the Santro -- not only made a successful entry, but went on to become the number 2 in the 3.5 million strong current market.

Honda, on the other hand ignored the 75 percent share of the auto market -- hatchbacks, and focused on sedans (globally, the small car segment, or the sub-C segment), and launched the City. At the time of the City's introduction, the sedan segment in India was dominated by the Maruti-Suzuki Esteem and followed by the Ford Escort, the Opel Astra and the Daewoo Cielo. The American cars were based on outdated platforms and never made it big in India. The Esteem and the Cielo were popular models because they were affordable and comparatively more reliable. However, the quality and performance aspects were totally missing. It was this large gap that the Honda City filled along with the Mitsubishi Lancer (the Lancer was the only other sedan in its class that provided competition to the City).

Since then, the City has been bread and butter for Honda India. Honda asked a premium for the City as there were no other products to compete with it and rich Indians complied. Some defied and bought the Lancer instead. Honda's India operations were profitable. However, the party was spoiled as the average salaried Indian started earning more and other OEMs started looking at the Indian market in earnest and launched competitive models. Honda's sales volumes took a hit.

And its been down for a while. Honda plans to boost sales of the City by this price cut. However there are deeper problems within Honda India and it products.

Here is my take on Honda India's issues:

Pricing - The Indian automotive market is highly competitive now. At three-fourths of the City's cost Hyundai and Maruti-Suzuki offers sedans with more features and creature comfort. Honda's lone hatchback, the Jazz, is priced around INR650,000. At the same price point most OEMs offer sedans. This is an important factor as the car is still an aspirational object for majority of buyers in India -- bigger is still better.
Local sourcing - Honda sources ~60 percent of the components for it cars (the Jazz, the City, the CR-V and the Accord) locally in India. Its competitors source 80-90 percent components locally and are aiming for 100 percent local sourcing. Local sourcing reduces input costs for automakers and is reflected in the bottom line of the company's books. It also helps reduce custom duties in many essential components, such as engines.
Diesel powertrains - With petrol prices nearly touching INR70 per liter, new car buyers are seriously considering diesel vehicles. Even if petrol and diesel prices were to be equal, ~35 percent Indian car buyers (personal estimate) would still prefer diesel powerplants. So, literally Honda could add 35 percent more sales volume. Anyway, with diesel engines becoming more efficient and less polluting, it is a very bad strategy to not have diesel powertrains, not only in India, but globally. Honda and Mitsubishi are the only OEMs in India that do not have a diesel option.

Three basic points, and Honda could once again dominate the entry-level sedan market in India.

The Chinese are here!

2010-08-26T23:56:00.001+05:30

Beijing Automotive Industry Holding Co., better known as BAIC plans to sell commercial vehicles in India. Good news, bad news? I say premature news.

Well, you see, China and India are the poster children of the global economy at present, especially in the automotive industry and these two countries are trying to make their mark felt in the industry. They drive substantial global sales, but do not have domestic companies that contribute much, yet, to those sales figure. China and India are core competitors in the automotive industry, like everything else. When it comes to these two countries, it is not about the companies, but about the countries. These two countries are growing at an incredible pace and they will be the architects of the present and future world economy.

So, a rapidly growing Chinese company trying to sell its wheels in India, or rather, to quote Bloomberg, "start its overseas expansion by entering the Indian market", is bad news for India's rapidly growing automotive companies (talking in terms of the global automotive scenario) like Tata Motors, Mahindra&Mahindra, Ashok Leyland and also for the smaller International Cars & Motors Ltd. (that is Sonalika - the Toyota Qualis look alike - for people unfamiliar with the name of the real company).

Okay, enough of cryptic clues. The crux of the matter is, both Chinese and Indian auto makers are trying to go global in a big way - they have the same goals, so it does not make sense for them to mutually compete in each other's domestic markets. India has a maximum of 10 auto makers, both passenger and commercial (yes, including Hindustan Motors and Premier), China has around 130 indigenous automakers!

Both these markets need to break even and their domestic auto makers need to win a decent pie of the global automotive market before they can start competing with each other. They are already struggling hard enough to make their presence felt among the Detroit and Germany big 6.

Here is the piece of news that got me started in the first place.

M&M acquires Ssangyong - Can we say that finally?

2010-08-26T00:16:00.002+05:30

Okay, we have been hearing about the Mahindra & Mahindra acquisition of Ssangyong for a while now and no further developments have been heard of; however, there is definitive news that M&M will buy a majority stake in the smallest of the Korean car makers, Ssangyong, by end-2010 or early 2011. At this stage there are no details of the amount involved in the acquisition. M&M mentioned that it will go through the final due diligence of Ssangyong sometime in September 2010 and then fix the deal.

Not many people have seen Ssangyong cars, rather SUVs - that is what this Korean car maker specializes in - low-priced, robust SUVs. The Korean SUV maker has vehicles like Rexton, Kyron, Rodius and one sedan in its entire line-up - the Chairman.

M&M, through this deal, can expand its line-up of SUVs; but when it comes to sedans - the basic ingredient for any versatile car maker - I can only hope that M&M does not have another sour experience like the Logan. Ssangyong, on the other hand, will not go bankrupt and have access to more markets and M&M's technology. With this deal, M&M is giving out all the signals that it intends to focus on SUVs - at a time when people are selling off their gas guzzlers and shifting to more fuel-efficient vehicles. Lets hope that M&M becomes the phoenix of the SUV market , and brings out SUVs that suit the taste and needs of the present and future markets - vehicles with more high-end torque, yet thrifty on fuel consumption.

Here is a ball-park SWOT analysis of M&M:

Strengths:

Well established as an utility and farm equipment manufacturer.
Has dealer networks in the US, South Africa, Latin America and other key markets.
Diversified business and hence the group has financial stability.
Few model line-up in the passenger vehicle segment, hence less complexity. Has the advantage to design a new global vehicle platform and bring out different products.
Has been making vehicles since the 1940s and has a lineage of sorts.

Weaknesses:

Does not yet have a mass-market sedan or hatchback - and hence missing out on the major passenger vehicle market share.
Has not yet reached the levels of international collaboration needed to bring out world-class petrol/diesel engines in the 1.3 to 1.6 liter displacement range, to be globally viable.
Vehicle platforms are dated and the company is still perceived as essentially commercial vehicle manufacturers.
Cannot really go global with just utility vehicles and SUVs. The Scorpio cannot sustain M&M for long.

Opportunities:

Emerging markets in South Asia, like Vietnam, Thailand and Indonesia, markets in Eastern Europe, like Russia, Turkey, et al and Latin American markets. M&M needs to develop a small/mid-segment sedan or hatchback to shares in these markets.
The acquisition of Reva holds lot of potential. M&M should aggressively pursue electric vehicle development at this moment, and if done properly, the company will have a headstart over many smaller but global players.
M&M should invest its research rupees in developing a global small SUV - which is the fad and demand of the day. It already has the expertise and just needs to tweak the engine and platform a little bit.

Threats:

The biggest threat for M&M is Tata Motors and the Chinese companies.
Other OEMs comparable to M&M are increasingly entering into technology sharing partnerships and thus have access to better technology.
Consumers in India and other potential markets have more options to choose from and if M&M does not diversify its product portfolio it will lose out to competition.

For those who have not seen Ssangyong vehicles:

Rexton

Mandatory fuel economy standard for India

2010-08-24T16:12:00.000+05:30

The biggest irony for a country obsessed with fuel economy is the fact that India does not yet have an official fuel economy standard set by the government. Efforts to set up a standard have been made in the past; however, like everything else in this country, those efforts yielded no outcome as everything got lost in the mire of bureaucracy and organisational power play.

However, things are set to change as the Environment and Forest Minister of State Mr. Jairam Ramesh, formally announced on August 2010, that there will be a mandatory fuel efficiency standard for auto makers. What worries me however, is the fact that the minister did not specify a timeline. He just said that a standard will be enforced “soon”. Now, from what little I know of these auto-related policies, there always is a time frame set for the enforcement of policies and future regulations. It would be a welcome change if this time the ball is really set rolling and we have a fuel economy standard by end-2012.

The automotive industry is gradually becoming very uniform across the globe. What I mean to say is that the regional differences of types of engines and cars are lessening as the world strives for smaller and more fuel-efficient cars. Auto makers are already collaborating with one another in terms of technology sharing so that they can bring out cleaner cars. This is partly due to the price of fossil fuel, growing awareness among people for the environment, the US suddenly waking up to the need to have fuel-efficient cars and lastly, but by far the most important reason, the very strict CO2 regulations imposed by the EU 27 states. The point, however, is that OEMs already have the technology, so an Indian fuel-efficiency standard set at par with global standards will not be impossible for auto makers to achieve, and this in a way will contribute to the much talked about harmonization of standards in the automotive industry.

Lets hope this time we really show we are concerned and join the global race to cut emission, reduce fossil fuel dependence and participate in a greener tomorrow.

Renault-Nissan teams up with Daimler

2010-04-07T17:02:00.001+05:30

Renault-Nissan enters into a strategic partnership with Daimler. All the three automakers will have around 3% stake in one another through equity exchange. The near-future aim of this alliance is to collaborate on the next generation Smart Fortwo and the Renault Twingo, including electric versions of the cars.

The overall objective of this alliance is to share and develop engines and powertrains for future passenger cars and light commercial vehicles for all three automakers.

In a nutshell, Daimler will get to use Renault-Nissan's latest generation small 3/4-cylinder small petrol and diesel engines for new Smart vehicles and also use these engines to introduce entry-level vehicles in the future. Daimler also gets to use Renault-Nissan diesel powertrains for it van, the Vito. Moreover, Mercedes-Benz Vans will get to include Renault-Nissan entry level models in its Light Commercial Vehicle portfolio from 2012 onwards.

In return, Daimler commits to lend its 4/6-cylinder petrol and diesel engines to Nissan's luxury car brand, Infiniti.

The deal clearly states that the brand and product identities of the three car-makers will remain intact.

There is also talks about Daimler and Renault-Nissan using one another's plants in the US to manufacture vehicles.

This looks like an interesting alliance provided Daimler keeps its end of the promise and not provide dated engines and powertain to Nissan like it did to Chrysler.

Whichever way the alliance swings, but one thing is for sure, the new age of automotive industry has arrived and many more consolidations are in the cards.

Recalling the Toyota recalls

2010-03-30T16:16:00.003+05:30

During my stint with erstwhile Chrysler, I learnt one important thing about the average American car drivers - they are a quirky and very paranoid bunch of people when it comes to the quality and the safety of the vehicles. No wonder they have the safest and the most technologically advanced vehicles; but at the same time over-dependence on technology has diluted the driver's intuition in the average American.

The recent Toyota recall story is not new. It is a deja vu of the Audi 5000 recalls in the mid-1980's. Anyway, we all know the story of unintended acceleration of certain Toyota and Lexus models and the number of recalls made, etc. In my opinion, Toyota did a commendable job in managing the negative publicity, but just a couple of months after the hue and cry is over, everybody seems to forget to find out what really happened. Were the Prius' really faulty, as alleged? What about the outcome of the investigation?

I stumbled upon Drew Winter's commentary in Wards Auto and I think it is a must-read. Drew gives very nice details on what really happened as the initial Federal investigation results showed up and further investigations are made. To read Drew's article click here.

Addendum - The NHTSA slammed a fine of USD 16.4 mn on Toyota stating that Toyota was aware of the faulty electronic throttle, but chose to remain silent. Food for thought - Toyota being fined means the Big 3 sales increase, two of which are owned by the US government.

Is BYD, China, buying the Maybach marquee from Daimler?

2010-03-30T14:11:00.003+05:30

The latest speculation in the automotive world is BYD approaching Daimler AG to buy the Maybach brand. BYD is one of the smaller Chinese automotive companies that focus in battery-operated electric vehicles. BYD already had teamed up with Daimler to develop electric vehicles for the Chinese market.

Interesting facts about BYD are that, Warrren Buffet has a 10% stake in the company and it was originally a Li-ion battery manufacturer for Nokia and Motorola.

Spokespeople from both the companies have clearly denied the rumors and have passed it off as market speculation.

The truth remains to be seen. But with a poor sale of around 200 Maybachs last year and Daimler working vehemently to lose its extra fat, such a rumor might not stay a rumor for long.

Geely buys Volvo

2010-03-29T21:20:00.005+05:30

The announcement of Chinese car manufacturer Geely buying Volvo Cars from Ford Motor Company is a big news. A landmark event or not, remains to be seen. I make this comment because if we consider the popular school of thought, according to which, consolidations in the future would leave about 5 major global automotive companies owning over 30 brands, Geely's acquisition seems like a small ripple in the grander scheme of things; but nevertheless an important milestone, especially for the Chinese automotive industry.

Estimated at USD 1.8 bn, the Geely-Volvo deal marks China's biggest overseas auto purchase and a global shift in manufacturing from North America / Western Europe to China.

According to Geely, its present and near-future aim is not to tap the western market but bring volumes to the the Chinese market and boost manufacturing. This objective is not so simple as it sounds. Volvo Cars sold around 50,000 units in China in 2009, while the market leader in the premium segment in China, Audi, sold almost 130,000 cars in 2009. But the acquisition is a step forward in the right direction for Geely. Already, a big player within its compatriots, Geely now has the famed Volvo safety design and vehicle engineering technologies at its disposal. This will take Geely a few steps ahead of the other Chinese automakers.

The deal took almost 2 years in the making since Geely went to Ford Motor Company with a speculative bid to buy Volvo Cars. But the buy-over did not happen earlier mainly due to two reasons -

1) Fears of loss of Intellectual Property. The Chinese manufacturers do not have a very good reputation of protecting the interest of foreign JV partners. Remember Chery shamelessly copying the design of Daewoo Matiz? (I heard Chery did such a fine imitation that the QQ headlamps would fit like a glove in a Matiz!)

2) Geely is essentially a private firm without government stakes in the company. This does not bode too well for a foreign investor because according to the Government Procurement Law of the People's Republic of China, "...purchasing activities conducted with fiscal funds by government departments, institutions and public organizations at all levels, where the goods, construction and services concerned are in the centralized procurement catalogue complied in accordance with law or the value of the goods, construction or services exceeds the respective prescribed procurement thresholds", basically, fiscal funds can be used only when the government gives a go-ahead.

But what is interesting is that Geely only paid USD 800 mn of the total USD 1.8 bn amount to Ford. The rest of the money comes from "regional investments", which basically means local governments.

After the unsuccessful attempt by the little-known heavy machinery maker Sichuan Tengzhong Heavy Industrial Machinery to buy Hummer, the Geely-Volvo deal is a new chapter in Chinese automotive history. What remains to be seen whether this is a mere ripple in major consolidations in the automotive industry that are to happen in the future or a milestone event that could change the global automotive industry and start a new trend.

Portion of Hyundai i20 production to shift to Turkey

2010-03-25T11:33:00.004+05:30

By June this year Hyundai will shift a part of its production of the i20 to Turkey. The main reasons for this shift are -

1) The production capacity (~600,000 units per annum) of the two plants in Chennai is almost saturated.

2) The recent spate of labor problems in the plant.

What this means for the Indian consumer is that the waiting period for the i20 will now be around 3 weeks.

This move also signifies the Indian economy losing out a portion of its revenue to an Eastern European country, which have become close competitors to India, China and other South-east Asian countries in terms of affordable labor and raw materials for automotive OEMs.

What seems curious is that, Hyundai after announcing India as its small car manufacturing hub, should have considered capacity expansion in India rather than moving to another country. But I guess this will be the trend going forward, as Turkey has the advantage of being closer to the European market besides offering the same USP as India.

The Dark Horse gets its strategy right – Ford hits India with the right product

2010-03-22T16:36:00.002+05:30

I like American cars, especially Ford. When I saw the Ford Escort around 1998, I was, let’s say, not so enthused. The Ikon was much better and the Mondeo was true Ford DNA; but Ford never could make a mark in the Indian market. Ford was never mass-market here and the only feeble effort was the launch of the Fusion in 2004. But like I discussed in an older post (look at the post at the bottom), the Fusion could never compete with the hatchback leaders in India.

But things are going to change for Ford in India and the B+ segment market here is in for some fresh competition from the Ford Figo. Ford, for the first time, understands the importance of the Indian automotive market and actually has a strategy. It took more than a decade, but finally, I feel Ford will see its market size grow in India from a puny 1.6% (volume).

I will not talk about the specifications as they have been discussed in many places, especially the Team-bhp review, which is all comprehensive. You can read it all here. My personal opinion is that two engine variants, 1.2 L petrol and 1.4 L diesel churning out 70 bhp and 68 bhp respectively are very decent options for the Indian buyers, though other OEMs have set a higher standards for power.

What I feel will make the Figo a hot-seller in India is its neat looks (no overambitious design experimentation like the Ritz, A-Star or the Beat), ample space in the car and most importantly the price. INR 4.5 lakh for the high-end petrol version and INR 5.3 lakh for the diesel variant places the Figo bang in the middle of the hottest selling hatches in India (the Swift and the i10). The mileages are impressive too. At 15.6 kmpl (petrol) and 20.0 kmpl (diesel), the Figo numbers are among the best offered in the country.

The improvements visible in the Figo are a step in the right direction for Ford; but it only means that Ford is catching up with Maruti, Hyundai and the other hatchback makers in India. What I really feel gives Figo the edge over competition is the fact that Ford has managed to pack its essence in a B-segment car in the true sense, namely, handling and the sheer driving pleasure. A Ford has always been a driver’s car. GM needs to pull its socks up.

Mahindra Xylo

2009-01-16T13:36:00.009+05:30

Finally the much awaited Xylo has been launched. I saw the pictures and I must say I was horrified! Ugly is an euphemism for this mutation of a Scorpio and a Sumo Grande. The headlights in particular make me pukish. I do not understand what fascination (or fetish) these Indian designers have for the upwardly curved grotesque angular head lamp assembly (and I thought A-Star was ugly)!

It could have been some what acceptable if the international automotive design trend is going in that direction; but it is not. Xylo's looks, unlike the Maruti Zen's, is NOT something you will grow in to (liking). Mahindra is keen on going the Detroit way by not learning from the "big 3"s design failures.

But like they say beauty is in the eye of the beholder. Apparently, many people are going gaga over the Xylo's looks! And why not, if we 'like' the TVS Victor, Yamaha Frazer/Gladiator looks, this is a piece of aesthetic wonder!

The interiors are pathetic. Cheap platic feel all over. I wonder what they were thinking when they decided to include purple/lavender cup-holders and under-seat storage, glove-box lining in an all black/dark grey set up.

Well, the Xylo does have some good features too. First, it is spacious and lives up to the name of an utility vehicle (or an MPV). It can easily take a family of 6 to a picnic 200 kilometers from home. Also, little considerations like lockable storage space under the seat, food tray make it very utilitarian.

A maximun power of 112 bhp @ 3,800 rpm and a maximum torque of 240 Nm @ 1,800 rpm gives the Xylo enough power for all activities an MPV is expected to do (C'mon we do not need to tow a trailer or a boat in India! We do not do such things). What I heard is that the M-Eagle engine that the Xylo uses is a toned down version of the 2.6L M-Hawk engine that the Scorpio uses.

I have a strong premonition that I will be encountering a lot of white Xylo's on my way to work three months from now. No doubt (like everyone has predicted), the Xylo will provide a stiff competition to the Toyota Innova, in terms of fleet vehicles; but I seriously doubt if the Xylo can match up to Toyota's quality and attention for details.

BASIC SPECIFICATIONS -

Engine Specifications
Displacement: 2498cc, CRDe, M-Eagle
Engine Type: Diesel
Maximum Power: 112 Bhp @ 3800 rpm
Maximum Torque: 240 Nm @ 1800 rpm

Dimension
Length: 4520 mm
Width: 1850 mm
Height: 1895 mm

General Specification
Seating Capacity: 8
Tyre Size: 215/75 R15
Suspension: Independent Coil Springs, Multi Link Coil Springs
Turning Circle: 5.40 m
Steering: Power
Brakes: Front Disk, Rear Drum
Gears: 5 Manual
Ground Clearance: 186.00 mm
Kerb Weight: 1830.00 kg
Fuel Tank: 55.00 L

Vishalaa - a rural restaurant in Ahmedabad

2008-12-29T16:53:00.007+05:30

These photographs were taken by me at a restaurant called "Vishalaa" in Ahmedabad. The place serves authentic Gujarati cuisine and maintains a rustic ambience which tries to embody the spirit of the hinterlands in Gujarat. The moment you enter, you are served with fruit juice (and a person scratching his nether region, in my case) and then you are led towards the musuem which basically houses kitchenware, some of which are even a thousand years old. The other attractions are a puppet show, folk singers, etc. Food is served in sheds which are dinning areas covered with tin roof and bare on the sides. Seating is on the ground (carpets) and flat logs serve as tables.

The food is delicious, though I do not remember the names of the items, except the dhoklas and theplas. Around four different varieties of "rotis" are served and as many different "sabjis". Food is strictly vegetarian and it is served in a continuous manner till the time you literally raise your hand signalling that you can stuff yourself no longer. "Paan" is served after you are done with your desserts.

Vishalaa is a nice place to experience authentic Gujarati fare and an overall nice experience. Be sure to take a local Gujarati along though, so that you know what you are eating.

A word of caution though, the restrooms are extremely dirty!

All set for dinner

Picture perfect!

Nut crackers!!!!

Pots

....more pots

.... still more pots

When you gotta scratch, you gotta scratch! "Purush"

Yamaha Motor India wakes up!

2008-03-18T11:34:00.004+05:30

Yamaha Motor India suddenly wakes up and decides that it will change its product strategy and launch bigger and more powerful bikes in India and be truer to it DNA worldwide - performance, innovation and design. The RX 100 and 135 were the only motorcycles that Yamaha could really sell in India. The RD 350, though the best selling Yamaha model globally, was introduced prematurely in the Indian market and has become a cult bike. For a decade and a half Yamaha seems to be in a deep slumber when it comes to the Indian market. The Crux, YBX, Frazer, Gladiator, were all a sham in the name of innovation and design. I mean, the people who designed these two-wheelers HAD to be aesthetically challenged. No wonder the drop in sales. Neither did a 1300 cc 'busa zipping John could push sales for a frankestenian Gladiator.

Now, Yamaha has launched the 1000 cc YZF-R1 (priced at around INR 100,000), 1670cc MT01 and the Gladiator Type SS and RS (repackaged Gladiator with a couple of extra horses-still very ugly). The bike to look out for is the 150 cc air-cooled FZ, which is scheduled to be launched during Diwali this year. The FZ to be launched in India is a replica toy of the actual FZ1, a 1000 cc monster. But still I give the thumbs-up to Yamaha Motor India for being the pioneer in scaling down a superbike to meet Indian cunsumer needs. I always wondered why can't these motorcycle OEMs never introduce a 150-250 cc scaled down version of their superbikes in India, keeping the design aspect same. Finally, somebody heard me.

When Yamaha Motor India, CEO and MD Mr. Mabuchi took a walk of Bajaj Motors' Pune plant, the intent and the new resolve of Yamaha was evident. That was almost a year back and now Yamaha Motor India has revealed it new strategy to gain market share. The product portfolio of Yamaha by end of this year would cater to all the three motorcycle segments in India - entry, executive and premium segments. I would definitely keep a look-out for Yamaha in the coming years and we could very well see a change in dynamics in the Indian motorcycle market.

Squaw

2008-02-19T19:00:00.001+05:30

Have been planning on a nice topic for a while, but have not quite got the time yet. Till then I thought of writing about something personal and lighter (the blue cabbage part of the blog :) ).

I take the opportunity to introduce the lady in my life - Squaw (Indian for a woman).

She is a Standard 350 Bullet. Year of manufacture is 1980 (December).

I have not done any modifications... The original 'Bullet' look has been preserved. I do not want her to be a wanna-be Harley Davidson Softtail or a mutated BSA Goldstar.

I have changed the saddle. This makes Squaw look low-slung and more elegant. I have added custom rear-view mirrors and retro tail-lamps/front number-plate. She has a 'monkey' shade on her headlamp (makes her look sleeker).

I had to do another 'modification' because it was necessary. I changed her old front suspension to the newer telescopic shockers with hydraulic damping.

As for the rest of Squaw, she is one of the old and authentic 'pieces'. She has standard 3.25 X 194/6 PR tyres and 6V electricals, does not have indicators and lets out a feeble (read soothing) beam on the highway.

I had to rebore the engine once and change the toothed-gear wheels. Its ignition key is still on the battery box and the headlamp switch near the speedo.

Ford Fusion. Why Did It Fail In India?

2008-01-24T16:58:00.000+05:30

I know it is quite late for an autopsy now. But on my way to work today I spotted a silver Fusion+ and I just felt like writing.

It has no curves, looks like a box and doesn't score on the aesthetic fore, either; but somehow I find the simplicity quite unique and utilitarian. I think the biggest design USP of the Fusion is its crossover look. It is a B-segment hatchback, but the front grille and the gradient of the hatch makes it look like a smaller version of a crossover. Also, a look at the beefy bumpers, curved wheel arches, block headlamps leave you feeling that this beast can, and needs to, go offroad. Moreover, with the amount of headroom and ground clearance, it is way ahead of contemporary hatchbacks in India. And with front MacPherson suspension and 15 inch wheels, you need not let out a silent curse everythime you encounter those out-of-proportion speed brakers in Indian cities.

Moreover, with an in-line 4 cylinder, 16-valve, 1.6-liter twin-cam Duratec engine churning out 100 horses at 14.9 kgm of max torque, this car offered one of the best in-its-class engine and powertrain options. What more, there is a 1.4-liter 67 bhp Duratorq diesel engine with a maximum torque of 16 kgm @ 4000 rpm, this car was loaded, atleast by Indian standards.

Then why did this wonderful set of wheels not do well in the Indian market, the way it did in Europe? The first obvious reason is the price. At INR 604,695 or USD 13,400 (base petrol) and INR 698,193 or USD 15,500 (base diesel), the Fusion is a luxury Indian consumers would rather not 'indulge' in...yet. Did Ford not do its homework on the Indian consumer and the market dynamics? Probably, yes. For 6 lakhs, you can very well manage to get a C-segment car, an Esteem or an Ikon or an Accent, maybe. The Fusion in India HAS to be bought by an individual belonging to the middle class or the upper-middle class. This section of the market would rather have a C-segment car if they invest a year's salary or slightly more on a car. This is the criteria on which four-fifths of vehicle purchase decisions are made here.

Having said this, I would also like to point out that there is also a niche consumer base of young people with high spending capacity. These individuals are technically aware of the advantages that the Fusion has to offer like, ABS, collapsable steering column, engine immobilizer, crumple zones, etc., and would buy the Fusion for what it really has to offer. Unfortunately, they still do not drive volumes in India. But for the majority Indian consumers the Fusion's technical superiority over other cars in the same segment is beyond perception.

On the other hand there are high net worth people, or the affluent, who are aware of what the Fusion has to offer; but with the amount of money they have, they would rather buy premium brands.

Now, to the magic figure that Indian buyers swear by. Yes, mileage. The petrol engine gives around 10 kmpl (23.5 mpg) and the diesel around 17 (40 mpg) in the city. How do the other cars in the same segment fare? This should make it obvious

Hyundai Getz Prime - 13.1 kmpl (31 mpg)

Maruti Suzuki Wagon R - 14 kmpl (~33 mpg)

Maruti Suzuki Swift - ~12 kmpl (28.2 mpg)

Tata Indica Xeta - 12.6 kmpl (~30 mpg)

Fiat Palio Stile - 12.5 kmpl (29.4 mpg)

All the compared fuel efficiencies are for their respective petrol engines and the engine capacity falls between the 1.0 to 1.2 liter range. However, I am aware of the fact that this is not 'apple-to-apple' comparison because the Fusion's 1.6 liter engine is far more powerful. The fully loaded variants of the Getz Prime (Petrol) and Swift (Petrol) cost around INR 550,000 (~USD 12,000) which about 50 grands lesser than the Fusion.
The chart explains why the Ford Fusion did not fare well in the Indian market. Ford placed a product in a slot that typically belongs to the luxury/premium cars in India.

Maybe, what Ford could have done is intoduced the 1.3-liter engine Ka rather than the Fusion. The Ka is a huge hit in Europe and is priced around 45% lesser than the Fusion. It has the same power to weight ratio as the Fusion and gives a mileage of around 13.4 kmpl (31.7 mpg) in urban driving condition. The Ka would have really helped Ford help enter the small car-segment.

Indian buyers want both performance AND economy in their vehicles and the segmentation of market based on the two is not as crisp as in Europe or America.

Another interesting fact, though on the sidelines, is that with the 35 mpg (14.7 kmpl) fuel ecomomy being made mandatory in USA by 2015, the Big 3 are gradually focusing more on producing fuel economic cars. In this regard, it would help Ford (and GM and Chrysler too) a big deal if it seriously considers tweaking the 1.3-liter Duratec engine to make it more fuel efficient and, maybe, launch a Ka for India.

Another, flaw which led to the failure of the Fusion in India was wrong marketing and publicity. The Fusion was launched in India in December 2004 and it had a head-start over the Swift. I am specifying Swift because, it is comparable to the Fusion in terms of the safety features offered. What Swift did right in its awareness campaigns was to highlight its advanced safety features. It has created new awareness among consumers and competition among OEMs in India. But Ford was in a position to be the pioneer in India to drive the awareness in safety features in India, which they did not. Simply put, they should have portrayed the Fusion in its true image - a car with advanced safety features, build for performance and nimble handling.

All said and done, the Fusion is REALLY a nice and contemporary car. Its weak points being bad fuel economy and premium price. I mean, if we can accept a Korean monstrosity like a Santro (looks-wise) and an ugly car like Tata Indigo, the Fusion should have got a fairer deal.

Note: I have used images from from public domain, except the chart I created. If any copyrigt or ownership issues are violated, I would willingly put out the specific image/s