Why is there a traffic jam? I asked. The driver rolled down the car window and I heard the crowd reply,Modna has come to Kolkata! The driver repeated knowledgeably,Modna aaya. In colloquial Bengali,Modna means stupid,but that was not what they implied. Inching through roads thronged with excited multitudes,I reached the airport to find that Argentinas all-time great footballer,Maradona,had come to town. This is our culture,instant emotional people-jam.
Similarly,when thousands of visitors walk through New Delhis Auto Expo,dont make the mistake of thinking the auto market will flourish in India tomorrow. Take retailing as an analogy. People enjoy air-conditioned comfort on hot summer days at the big malls,but most leave with no shopping bag in hand. In nine years,retailers have made no money. Growing numbers within a second should not be taken as business conversion.
Western auto manufacturers have not understood Indias diverse multi-cultural mentality and habit of crowding around whatever is happeningit could be a fight,a jugglery show or even an accident spot. Theyve developed sophisticated or mass cars for the pleasurable experience of a long drive. But in Indias pathetic road infrastructure,this emotion does not exist. Sophisticated auto companies think affluent Indians will flaunt money. Thats possible in the luxury section where the big buy becomes a museum piece for that show-off factor. At the Frankfurt Auto Expo last year I observed the future of the vehicle to very clearly be green,an area India has to start thinking about seriously.
Trying to implement an automobiles previous success in the unidirectional West as a readymade solution in India will not work. Let me explain. To sell them to the masses after World War II,vehicles were made relevant to different societies. Americans liked big sized Hollywood style cars. Italians had small cars to ride the small cobbled streets of their ancient cities,as well as the macho luxury vehicles corresponding to Mediterranean chauvinism. Robust German cars were akin to their hardy culture where their autobahns have no speed limits but where the stringent discipline of keeping 50 metres between cars is observed. Swedens population scarcity made sure safety was a must. Colonial British culture made the vehicle a royal divan. Even if that industry is sold out,that stature has to be maintained. Japan always thought they will conquer the world so long lasting quality was important.
I remember in the 1980s,European showrooms sold cars without features such as AC,sound system,both sides mirror,headrest or wheel cap. These were available as extra options. The Japanese stormed the market with,Take the key,and drive it away, giving inbuilt,all optional features. Inbuilt feature excellence with outstanding quality made Japan the worlds No.1 automaker. They broke into the American market with the small vehicle,which Europeans failed to do. To sell in different countries,the Japanese spend enormous time to study the physiology,psychology and sociology of customers there. Korea has since followed them.
In 2009,Indian passenger cars accounted for just 3.6 per cent (2.3 million) of the 56 million passenger cars produced in the world. So theres an opportunity to make huge volumes here. The biggest mistake of Western automakers is not designing the vehicle according to Indian needs and desires. How do you translate Indianism into automobile design for the billion plus,multi-cultural India? For example,Henry Ford in 1930 incorporated the new US living style of large windows at home by having big car windows,thus aligning the vehicle to societal context.
Today I can only see Mahindras Bolero type of vehicle to be right for Indias mass population. It serves both earning and lifestyle purposes,suits Indias rough roads,gives great mileage,is a value-for-money buy,and has good resale value too. The Japanese and Koreans have understood India better,that mobility is our biggest priority. Indians value qualities such as low running cost,less service,easy maintenance,high aspiration and earning potential. Suzuki,Hyundai and Honda are doing a marvellous job in bringing India the small car at an affordable price.
Why should the vehicle for mass scale sales be useful for livelihood plus lifestyle? At least 190 million households earn less than Rs 200,000 per annum; their desire to buy a vehicle is totally locked. For them to even dream of a vehicle,auto manufacturers have to become innovative. The vehicle must be suitable for different earning purposes,and marketed very differently from traditional sales methods. But first,they have to educate target customers on how they can earn Rs15,000 more per month by utilising the vehicle. For example,apart from the husbands regular work,the wife can commercially use the vehicle for jobs such as ferrying school children,doing home delivery services for flowers,cooked food,tailored or dry-cleaned clothes,or running a mobile books/CD/DVD library. This way the bank EMI becomes affordable,vehicle running cost gets taken care of,and family joyrides a possibility. To incentivise them,manufacturers can offer a free driving license with training for a second person in the family within the vehicles price.
Three fundamentals are required to design this low cost vehicle: 1. A system of highly flexible features for multiple functionality usage. The inside space should be automatically or mechanically managed to make it relevant for earning purposes.
2. Very elegant vehicle to match the young generation of India. 3. Low running cost in any road condition. But low cost cannot mean ugly or bad fit and finish. All income levels want to enjoy the glamour of a vehicle whose aspiration value should sustain at least 5 to 7 years.
Tomorrows automobile industry can become a service industry. With regular EMI to the manufacturer people can change their vehicle at any time. As engineering and technology have to rapidly change to find the best alternative energy system,only an auto service industry will ensure the customer need not have to look for frequent version changes,as in the software industry.
Shombit Sengupta is an international Creative Business Strategy consultant to top management. Reach him at www. shininguniverse.com
