Luxury Brands in India Must Reinforce a Premium Image During Sales Experience

Mohit Arora

Mohit Arora

The luxury vehicle market in India has grown in recent years, with premium sales reaching 26,000 units in 2013. This number is expected to triple to 84,000 units by 2020, according to our strategic partner LMC Automotive. In addition, an increase in the number of luxury models available in India, coupled with attractive financial options that enhance affordability, has helped the luxury market to grow.

Success, however, brings with it additional challenges for premium brands. Sales growth adds pressure for luxury brands to differentiate themselves from the mass market brands. According to findings in our 2013 India Sales Satisfaction Index (SSI) Study, overall satisfaction with the sales experience in the luxury segment averages 873 points on a 1,000-point scale. Although the luxury segment average is 31 points higher than the massmarket segment average (842), this index score is not a major differentiator for these brands, based on study results.

The price of luxury vehicles is much higher than the price of mass market vehicles. We see that customers expect luxury brands to provide a truly differentiated experience to enhance the value of ownership of these vehicles. The current network of dealers does not provide the level of differentiation expected to reinforce the premium image of luxury brands among these more demanding customers. Continue reading ›

Shorter New-Vehicle Owners are Less Satisfied with their Seats

VanNieuwkuykM

Mike VanNieuwkuyk

Seat height and headrest adjustments can be especially troublesome to new-vehicle owners who are shorter than average height (under 5 feet 5 inches), according to our 2013 Seat Quality and Satisfaction Study*.

These shorter height owners experience nearly twice as many problems with their seat height adjustments than taller new-vehicle owners—1.2 problems per 100 vehicles (PP100) vs. 0.7 PP100.

One-third of the shorter new-vehicle owners say seats do not adjust high enough. In addition, overall satisfaction with the driver seat among these shorter owners is significantly lower than among those who do not have a seat height adjustment problem. Continue reading ›

J.D. Power Roundtable Provides Future Outlook and Views on Technology

VanNieuwkuykM

Mike VanNieuwkuyk

Will the momentum of recovery in the auto industry continue to build was a theme of this year’s J.D. Power International Automotive Roundtable at the Peabody Hotel in Orlando,FL. More than 475 auto industry members attended today’s conference, which was held in association with the NADA Convention and Expo that continues through the weekend (Feb. 8 – 11).

In the afternoon session, James Dunn from the Florida-based retail group, JM Family Enterprises, Inc.; Vicki Poponifrom,  American Honda Motor Co., Inc.; and Barry Ratzlaff of Hyundai Motor America, joined a J.D. Power automotive expert in a discussion about changing technology in vehicles. The panel was led by moderator Ed Lapham, executive editor of Automotive News. J.D. Power’s Mike Van Nieuwkuyk, executive director of global vehicle research offered insight on changing technology requirements. Some questions and Van Nieuwkuyk’s observations and insight are summarized in the post below:

Technology in the Car and Consumer Expectations

Q: Evolving platforms—such as PDAs and Tablets, are providing new ways for consumer to communicate, share information and engage with product and service providers. How is the automotive industry keeping pace?

VanNieuwkuyk: Since consumers spend nearly 3 hours per day in their vehicle, they are seeking to make their time in the vehicle more useful and enjoyable. We see that new features that offer consumers greater connectivity, real-time information and flexibility to select who or what and how they want to be connected are being received with great consumer interest. Continue reading ›

Mini Car Competition Intensifies in India

The introduction of Hyundai’s all-new small car, the Eon, which was previously known by its code HA H800, will heat up the mini car battle in India. The Eon is expected to be a strong challenger to market leader Maruti Suzuki’s Alto. The Eon, an entry-level hatchback aimed at capturing first-time car buyers in India, was developed over 4 years at a cost of INR 9.56 billion (US $181 million).

In order to meet the requirements of car buyers in this growth market, Hyundai Motor’s research and development team in Hyderabad worked with Hyundai’s engineers in South Korea to design and develop the Eon exclusively for India. The result is a model that is stylishly designed and promises fuel economy of 21 kilometers per liter (equivalent to 13.05 miles per liter or about 79.38 miles per gallon)under test conditions. Powered by an 814 cc 3-cylinder gasoline engine, the Eon is also competitively priced from INR 285,309 (US $5,400) for the base model Eon D-Lite to INR 396,262 (US $7,500) for the top-end Sportz version, which has additional features such as keyless entry and a driver air bag. Continue reading ›

Lighter Vehicles are One Way to Reduce Fuel Consumption

Mike Omotoso

Automakers at this year’s Frankfurt International Motor Show agree that future cars and light trucks are going to have to become lighter for better fuel economy, according to most news reports. However, manufacturers at the event continue to have a number of different ideas and approaches to powertrains and alternative fuel choices for their vehicles and concepts, ranging from oil to electricity to hydrogen.

Admittedly, reducing the weight of a vehicle is an important tool for lowering fuel consumption. A rule of thumb is that fuel economy improves by 1 mile per gallon (mpg) for every 100-pound reduction in vehicle weight. Using lighter materials helps to reduce vehicle weight without having to make the vehicle smaller. In most cases, it is also cheaper to reduce vehicle weight than to make changes to the engine and/or transmission. It is also far cheaper to switch from steel to aluminum than it is to build a hybrid or electric vehicle. The reduction in fuel consumption won’t be as large, but it is still beneficial to carmakers and consumers.

What about safety? Some auto industry people have mentioned that lighter weight also affects driver and passenger safety—especially with smaller, light vehicles in crashes with heavier trucks or large SUVs. Yes, it is true that if a small car or other sub-compact collides head-on with a full-size pickup truck or SUV, the small car will probably have more damage. However, all cars have to pass federal crash safety tests so people should not think that small, light cars are unsafe and not roadworthy. Continue reading ›

Risks Apparent as China Remains Preoccupied with Size and Speed

 

Marvin Zhu

China’s government has earmarked a previously unimaginable 2 trillion yuan (about $300 billion) to build the world’s largest national high-speed railway network. So far, only about half of the total planned route distance of 25,000 kilometers (16,000 miles) has been completed. One of the most recent additions to China’s high-speed railway marvel is an express train between Beijing and Shanghai, which opened in June 2011, some two years ahead of schedule.

China’s ambitious “great leap forward” in industrialization and modernization has been understandably making headlines around the globe. However, these glowing platitudes abruptly turned somber on July 23, 2011, when one of the celebrated Beijing-Shanghai high-speed railroad trains crashed, killing 40 people and injuring some 200 others.

While bad weather and a subsequent system failure were found to be the main causes of the crash, some people speculate that the haste with which the railway was built—driven by thought of generating fast profits and political goodwill—should not be overlooked as a mitigating factor. China has been operating for some time on a progressively “build bigger, go faster” agenda, one where safety and reliability are not always given top priority.

Automotive Industry Caught in Bigger, Faster Tailwind

For more than a decade now, the “build bigger, go faster” mantra has prevailed in China’s automotive industry as well. Ever since China supplanted the US as the world’s largest automotive market in 2009, industry players have been in a fierce race to expand. Over the past two years alone, trillions of yuan have been invested in the car-making business, as automakers race to ramp up production. This frenzied expansion is expected to raise China’s vehicle production capacity to 31 million units by 2013, nearly doubling total sales recorded in 2010. Continue reading ›

J.D. Power Experts and Auto Industry Leaders See a Return to Stability

Leslie Cocco

The auto industry appears to be stabilizing; credit seems to be easing up; and there is a wave of exciting new products—including smaller, more fuel-efficient vehicles—that will attract new-vehicle buyers in the US market this year, according to J.D. Power experts and industry leaders who spoke at this year’s J.D. Power and Associates International Automotive Roundtable (Feb. 4) in San Francisco, CA, which was held in conjunction with the 2011 NADA Convention and Expo. There was encouraging news from the provocative and comprehensive one-day event.

For instance, Jeff Schuster, executive director of automotive forecasting at J.D. Power and Associates, who was one of the event’s opening speakers, presented a positive outlook for the global automotive market. He told participants that new-vehicle redesigns and small vehicles will help drive the US auto market recovery in 2011. Schuster estimated that some 13 million retail units will be sold in the US this year. On the green front, Schuster also projected that worldwide hybrid and electric vehicle (EV) sales will surpass 5 million unit sales by 2020.

The Roundtable’s first keynote speaker, John D. Porcari, Deputy Secretary for the US Department of Transportation, discussed how the auto industry has moved from merely surviving to thriving, and noted that “safety sells.” At the same time, he cautioned that the greatest emerging auto safety risk is distracted driving. His message to automakers: “Think long and hard about features in your vehicles, and keep the dangers of distraction in mind.” 

Industry leader Sergio Marchionne, CEO of Italy’s Fiat, which owns 25% of Chrysler Group, made news and blog headlines when he told Roundtable participants that it is possible in the next few years that Chrysler and Fiat’s auto divisions could operate as one company, possibly based in the US. In a compelling presentation, Marchionne profiled Chrysler and the plight of the auto industry during the year before and after the company came out of bankruptcy. He suggested, “We can no longer afford to be wasteful; the industry needs to be strategic and adapt.” Marchionne was upbeat about Chrysler’s future and said the automaker is on the road to recovery with increased market share and a rejuvenated lineup. Continue reading ›