Understanding the dynamics of Indian Auto Market
Nissan recently launched its small car Micra into the Indian Market. Nissan like any other auto manufacturer expects to gain from this segment of auto space. But, the question that arises here is, Has Nissan done enough to succeed in the Indian auto market? Will the brand “Nissan” prove to be a winner?
Indian Auto Sector is utterly unpredictable. Even after lot of research, many auto manufacturers fail to make an impact. Take Mercedes-Benz as an example. It gained the advantage of early entry into the Indian market and was the market leader in the luxury car space; but BMW faltered Benz’s position in just half the time. BMW overtook Benz as the market leader. The segment now has extreme competition with products form Volkswagen (Passat, Phaeton), Audi (A & Q series), Nissan (Teana), and others… The liking of Indian public is very impulsive and has become very difficult to figure it out.
This makes it very difficult for auto manufacturers to make out what its customers want. Just imagine Honda shipping Sarees to Japan…! No, it’s not to promote Indian culture, but used by Honda’s R&D center so that women can enter and exit the car with ease. Now lot of manufacturers are providing a set of special safety features considering the extreme Indian conditions (be it Road or Driving!). In some days we’ll see that ABS and Airbags will be a standard package in the car. The Indian versions of International cars already have a greater wheelbase.
Nissan has said to understand the uniqueness of Indian Market and has thus launched Micra. It has started aggressive promotions and is getting good initial response. But the huge competition in this segment is worrying Nissan, as this is a very important bet; that is if they succeed they will be playing in numbers and instantly get recognition in this market, which in turn will allow them to leverage their other models. If failed; they would have to start from scratch making it extremely difficult for them to expand and meet their targets.
Let’s look at the competition. Maruti Swift is the segment stalwart. But, many auto makers have experimented and tasted success. Chevrolet Beat, Ford Figo, Volkswagen Polo, Maruti Ritz, Hyundai i10 & i20, Fiat Punto – all have their loyal followers and are doing good in the market. It’s the competition of space and price; i.e. who’ll prove to provide the best value – be it in terms of Luxury, Space, Mileage and Price. Nissan is not a well known brand in India; hence it’s very challenging to persuade the customers to buy its product. And less Service Center numbers will add to Nissan’s woes. Even Fiat had to partner with Tata to promise a better service delivery. Chevrolet’s Beat is selling in great numbers as Chevrolet has improved its Service in last 5 years and is also leveraging on the confidence it got after successfully selling Spark in the small car segment.
Nissan has also roped in Ranbir Kapoor to represent the brand. The explanation to this being the mass appeal and uber cool charm of his. The ads have already hit the television screens and have gathered mix responses. Nissan is aggressively promoting its luxury features (keyless entry and start); a feature found on luxury cars where you can keep the key fob in your pocket and press a button to start the car. But on the larger side of the picture I feel; Nissan Micra won’t be able to break the ice in the Indian market for Nissan. And along with just a dozen dealers Nissan wouldn’t be able to fit in the demand of the Indian Customers.