December of every year is a strange time for me. I start every year optimistically, but turn into a psychopathic pessimist by the end of it. This year, the feeling is stronger. The end of this year feels like we’ve lost a decade. And that’s what the mood is like in the automotive industry as well.
Automakers had hoped for some improvement in sales during the festive season. But that was not to be. A November report in the Economic Times spoke of how desperate the situation really is. It says Pune’s automotive cluster remained shut till the ninth of the month. Why? Manufacturers had hoped that the prolonged shutdown would help bring inventories in line with demand. In other words, no point producing more cars when your dealers can’t sell the ones they’re already holding in their stock.
Some newer models, like the Grand i10 for example, are seeing some manufacturers through tough times. And with its market share and high penetration, Maruti can hold on too. But a lot of other manufacturers are badly affected. M&M, Tata, VW, GM, Toyota… all of them have cut back production.
And then there’s Ford. Its problem is that it just can’t make enough EcoSports to satisfy demand, a problem any manufacturer would love to have. Buyers have to wait up to nine months for delivery. A jealous friend at Maruti told me that dealers were making out-of-turn deliveries and selling EcoSports at a premium, sometimes of up to a lakh.
Another friend who’d booked the car four months ago had another story. His Ford dealer told him that prices had gone up by Rs 60,000 since he had booked. Best of all, the dealer told him that prices had increased because the rupee had weakened vis-à-vis the dollar. I must admit, of all the excuses I’ve heard, this was one of the funniest. I wonder if Ford will reduce prices now that the rupee is up from near Rs 69 to about Rs 61 per dollar.
Anyway, my friend had paid the booking amount before prices had been announced. So he didn’t have any document, aside from a simple receipt for his booking amount, which explicitly stated what the car would cost him.
Of course, he was free to cancel the booking if he liked. You see what has happened here. If a manufacturer makes a model that has high demand, the dealers can literally change the rules of the transaction. And it’s not illegal. Unethical, sure, but who cares? It’s not as if Ford has lost any substantial amount of bookings for the EcoSport. It may have lost some goodwill, at most.
Point is that when you have a product that everyone is crazy about, why not milk it? Most importantly, when you’ve entered a segment with almost no competition, why wouldn’t you? I’ve been writing for 12 years now that the mini-SUV segment is there for the milking in India. And by mini-SUV, I really mean hatchback on stilts. And no, I don’t mean a lazy job like the VW Cross Polo.
Anyway, no manufacturer has exploited this segment in all this time. Even cars like the Scorpio and the Duster, though a size larger, have been wildly successful. So when Ford came up with its good looking, modern, sub-`10-lakh offering, it had a winner.
Now of course, there is talk of other similar offerings from other manufacturers. But for the next couple of years, Ford has a free run of this market.
One manufacturer best placed to come up with a credible mini-SUV was Tata. It has some of the best-designed cars in the country. It has the experience of making proper utility vehicles like the Safari, Sumo and Aria. And it has the Indica platform. Why it hasn’t come up with anything so far is beyond me.
Back in 1996, Tata saw the demand for a diesel hatchback before anyone else in India. Since then, it has had hits like the acquisition of JLR. And misses like the underwhelming response to the Nano. A well-designed, modern mini-SUV would certainly have been a far less risky proposition than the Aria or the Indigo Marina.