When the tiger growls and the dragon roars at the same time on the same continent, they are both heard and they hear each other.

Why must Indian automakers pay heed to what happens in Beijing? The soaring auto sales in China, albeit slowed down last year, have jolted the global automotive industry to feel the repercussions. All ears, Indian automakers included, tuned in to China’s capital as Beijing Auto Show kicked off. The country’s economic policies, the sentiment toward auto incentives and projected car sales are things automakers have to consider when outlining their growth plan globally and re-gionally.

Now, the curtain has fallen on a highly successful 2012 Be-ijing Auto Show, which was attended by senior executives from many of the world’s largest automakers. After some re-flection, here are a few key takeaways that Indian automakers can take learn from the Beijing Auto Show:

GO LOCAL

International automakers made it loud and clear during the auto show in Beijing that they are listening to Chinese con-sumers and are producing cars for the Chinese market. For ex-

ample, Aston Martin and Jeep are two of many brands that de-cided to go for the most obvious and blunt visual approach to wooing Chinese consumers – by deploying a Dragon emblem on their latest model offerings, hoping to tap into Chinese af-finity for the most powerful symbol in the Chinese zodiac.

While using the Dragon emblem might be considered flat-tering, automotive marketers need to be careful. Chinese con-sumers are increasingly becoming more global and sophisti-cated in their tastes, and leveraging the revered dragon could be considered pandering by some. In short, the key is to “go local” with marketing knowledge, without going provincial.

In India, knowing what appeals to consumers is equally important for New Generation Indian Consumers (NGICs) — those born between 1975 and 1990 and members of the first generation to be exposed to a new world of ideas, and like their Chinese counterparts — are more sophisticated and worldly than their predecessors. And they are also quite dis-cerning when it comes to their vehicles.

According to a J.D. Power research, one of the top reasons cited by consumers for rejecting a model is the dislike for the exterior design. In fact, one out of every four customers cites this as a reason for rejection, which indicates that there is much room for improvement in understanding these custom-ers.

BEIJING AUTO SHOW — KEY TAKEAWAYS FOR INDIAN OEMs

Mohit ArorA, Executive Director, J.D. Power Asia Pacific

Guest commEntAry

www.autotechreview.com12

Other carmakers at the Beijing Auto Show decided to go the practical route, with good old research and observation. Nissan, for example, has recently configured the rear seating of its Infiniti cars to create a more spacious rear seating area, to cater to the influx of businessmen travelling in China. This is a cue for carmakers in India, considering that data from J.D. Power India studies show that one in five new car buyers em-ploy a chauffeur to ferry them around in the cities.

Our recent 2012 India Vehicle Dependability StudySM (VDS) also finds that there are a higher number of problems experienced among vehicle owners who employ a driver, com-pared with those that do not employ a driver. The reason for this is that vehicle owners, who are being chauffeured, seem to be more observant of various aspects of their vehicle and have more opportunities to observe and interact with the vehi-cle and, thus, are more sensitive to the problems that may crop up.

The long-held assumption that driver comfort is of para-mount importance is now being questioned. Instead of pam-pering the driver, it is now critical to indulge the rear passen-gers to ensure that the purchaser of the car is happy.

Paying heed to local sentiments in a particular auto market can certainly be profitable. Volkswagen is by far the highest-selling automotive brand in China. Part of its success story in China is due to its strength in localising products faster than

its competitors. In India, however, Volkswagen has much to work on in this respect.

For example, findings from our 2011 India Initial Quality Study show that a higher proportion of VW customers report problems related to clutch pedal effort compared to other brands in the same segments. Consumers in India tend to use the clutch far more than their European counterparts while travelling on congested city roads, and thus require easier pedal effort.

THE RISE OF THE SUV

There is no doubt that the phenomenal growth of the SUV seg-ment, which was evident at the Beijing Auto Show, is fuelled by rising incomes and changing lifestyles. This segment is also more insulated against rising gasoline prices as data from our China Sales Satisfaction Index Study show that buyers in this segment are less concerned with fuel economy and price, and more interested in roominess, interior comfort, and attractive styling. Moreover, luxury SUVs have become a status symbol and are seen as a clear announcement to the world that “one has arrived”.

In India, the same scenario is also being played out. Car-makers such as Toyota, BMW and Audi have recently reported that their SUVs are completely sold out for the next two months, even at a time when there are industry fears of falling car sales for calendar 2012. Both Chinese and Indian custom-ers like the higher seating position of SUVs as it gives them

better visibility over the traffic congestion on city roads. The average age of drivers in this segment is becoming younger and the desire of SUV buyers is to be seen as rugged, yet suc-cessful.

Our 2011 India Automotive Performance, Execution and Layout (APEAL) StudySM indicates that more than one-half of repeat car buyers in India select a model that is either larger or more expensive than the model they previously purchased. Vehicle ownership has always been a tangible sign of progres-sion in India and the SUV, especially luxury SUVs, currently sits right at the end of the aspiration spectrum. To reach this milestone is especially important for the affluent Indians. Therefore, ensuring development in the SUV segment is a must in India as it will offer a boost to an automaker’s image.

GREEN VEHICLES ARE HERE TO STAY

Despite scepticism related to the low volume of green car sales, automakers were eager to showcase their green technol-ogy at the Beijing Auto Show. Like China, India’s foray into the electric vehicle (EV) realm is still in a very nascent stage, and the future is uncertain. However, that is not stopping au-tomakers from making huge investments in this vehicle cate-gory.

One reason is the shift in the regulatory framework for both countries. Beijing is exerting pressure on foreign carmak-ers to invest in the clean energy field, in cooperation with their Chinese joint venture partners. And, India’s government has proposed full exemption from basic customs duties and a concession rate on excise duties for batteries imported by elec-tric vehicle manufacturers. All these recent developments highlight the growing focus of both governments to encourage the growth of electric vehicles.

The other reason is that carmakers have to go green in or-der to maintain a positive image. Data from both our China and India studies show that green vehicles resonate extremely well with our respondents. In India, more than two-thirds of new car buyers are more likely to purchase their next vehicle from a manufacturer with a green rating versus an automaker without a green image.

Lastly, owning a green car appeals to most consumers’ in-ner conscience. To borrow from Maslow’s hierarchy of needs – what is there to impassion car buyers, when they already own the latest luxury car model? When self-esteem is no longer a need, a car that evokes concern for the environment may be the next big thing.

Karma anyone?

I It’s critical to indulge the rear passengers to ensure

the car purchaser is happy

13autotechreview July 2012 Volume 1 | Issue 7