Urban mobility concepts - Daimler betting big...

I have been closely following the developments in the "field" of urban mobility, or as many say, mobility concepts, and one thing is clear, Daimler AG is betting big on it.

They first made headlines with their car2go program somewhere around 2009 (?) through which you could walk up to a smart fortwo for rent, swipe your smart card, drive to wherever you want within the city and just leave it there.

Now I read that they have acquired a minority stake in a Munich-based company called tiramizoo. Last year, tiramizoo launched a fully automated online booking platform for local courier - meaning you just fill in an online form stating what, where, when and your packet will be delivered! Daimler plans to capitalize tiramizoo's expertise in optimizing flow of goods (efficient use of urban road communication) to add more innovation to services already offered in its car2go program.

Earlier, Daimler also acquired stakes in MyTaxi (an online taxi booking platform) and carpooling.com. car2go already has 150,000 registered users. It seems like Daimler is betting big on the concept of urban mobility and is playing its cards right and has managed to stay ahead of it competitors, especially BMW and Peugeot.

I think Daimler is going to make the concept of urban mobility popular and mainstream.

Watch out for Daimler! 

Renault...Focus!

I just read that Renault launched the Scala yesterday. Logical move, but not in India. Here is why. Renault (Renault-Nissan) launched the Micra, and it did not help the Nissan badge; sales were not sustainable. Couple of years later, Renault broke-off the Renault-Mahindra tie-up and went full-steam with popularizing the Renault brand and launched the Duster (a very intelligent move - something that hit the sweet spot) and (to my horror) the Pulse!

The Pulse is a badge-engineered Micra. I felt repulsed! Does Renault not respect the intelligence of the Indian consumer (to not read through this brand engineering gimmick)!?

The Pulse did no better than the Micra and now Renault launches the three-box version of the Pulse / Micra...the Scala!!!

Why!?

Everyone has been crying horse, "Renault-Nissan get your after-sales network up and running; your cars are good and we will buy them...provided we have the safety net of the knowledge that there is a service network to support the products."

Mr. Ghosn, the fact that a strong aftersales network is the magic to an automotive brand's success is no rocket science...

Rest in peace Carroll Shelby

A great loss for the automotive world.

Force ForceOne a little too late for the Indian market

A body-on-ladder frame boxy SUV from an Indian commercial vehicle maker Force Motors, the ForceOne was launched in October 2011. It was a product aimed at the conspicuous gap in the Indian SUV market, between the  INR 800,000 (US$ 16,000) Mahindra Scorpio and the INR 1,800,000 (US$ 36,000) Ford Endeavour. Priced at INR 1,100,000 (US$ 22,000), the ForceOne should have been an instant winner in the fastest growing passenger vehicle segment in India - SUVs (Business Standard Motoring - ForceOne review). The SUV also boasts of the Daimler OM651 diesel engine which once powered the Mercedes-Benz C 220 CDI and E 220 CDI. Force Motors planned to sell ~4,000 units of the ForceOne between its October 2011 launch and September 2012. It has sold only 1,200 units until March 2012 and I have seen exactly ONE ForceOne on the road since its launch.

So what went wrong for this SUV?

Timing.

Before the ForceOne was launched, Tata Motors already had the Aria, a multi-utility vehicle (MUV), in the offering at the same price point. The Aria is fully loaded with safety and creature-comfort features, such as ABS, traction control, rain sensing wipers, touch screen infotainment console - everything. It still did not do well because of its price and well, because it was neither a car nor an SUV. Moreover, a couple of months after the ForceOne's launch, Mahindra came up with its XUV-5oo SUV - again at the same price point as the ForceOne's. The XUV-5oo scored over the ForceOne mainly in terms of looks - the XUV-5oo's looks are far more contemporary than the ForceOne's; and ride quality and handling, primarily because the XUV-5oo has a monocoque chassis (Business Standard Motoring - ForceOne and XUV-5oo comparo).

All the 'drawbacks' that the ForceOne has in comparison to the other products available in the market are just functions of timing. Indian consumers have accepted uglier cars, for example, the Mahindra Xylo and inferior quality cars, the Tata Sumo. However, in the present market scenario, the Indian consumer has much better choices for INR 1,100,000. If the ForceOne would have been launched, say, 5 years earlier and INR 400,000 cheaper, it had the potential of redefining the Indian SUV market. However, with the announched launches of the Renault Duster and the Ford EcoSport by end-2012, the fate of the ForceOne seems to have been sealed.

Although, I will definitely look out for the 2013 Gurkha!

The Fiat 500 is not a chick car!

It is funny how at times celebrity endorsements have the opposite impact on product popularity. Recently, I stumbled upon the Jennifer Lopez Fiat 500 campaign in the US (Official Fiat 500 video - Youtube). While there is nothing wrong in J Lo trying to bring back an iconic car to life, that too in a market where it never had any presence to start with, I still could not help but wonder why the Fiat guys could not get hold of a better brand ambassador for the cute little car.

As I started reading and looking for consumer responses to this particular campaign, I was not surprised. Most of the people, especially the ones aware of the Fiat brand and the 500, were not at all entertained. Simply because there is no relation between J Lo and the 500. Also the fact that J Lo is not a certified auto freak did not help either. For the purists, the whole campaign was 'tasteless.' Further, it is rumored that J Lo used a body double for the scene in the commercial when she zips around her 'block' in the Bronx and that she fumbled as she tried to open the car’s door in a live television appearance during the American Music Awards (NY Times). These 'misadventures' did not go too well with the audience. Neither, could J Lo convince the auto enthusiasts, nor could she convey the message that she still is 'Jenny from the block' and she loves driving the cute and maneuverable 500. In fact, Laura Soave, the Head of the Fiat brand in North America, lost her 20-month-old job especially due to the J Lo-500 campaign.

However, the ad campaign cannot be totally brushed aside. It did attract attention, although not from the intended target, but from teenagers and younger consumers who have no idea about the past antecedents of the 500. The campaign went a long way in branding the 500 as an essentially women's car. As a damage control mode, Fiat has now roped in Charlie Sheen for the 500 Abarth (the souped up version of 500) campaign (Youtube). I am still not sure whether an aging womanizer saying "Not all bad boys are created equal" will woo the potential 500 buyers.

Finally, Fiat seems to be getting it right with the Let your Italian out campaign. In fact, current Fiat owners and Fiat enthusiasts seem to have given the thumbs up to this advertisement (Fiat500owners.com). Hopefully, Fiat should be able to reach its ~5,000 a month sales figure for the 500 now.

Moving on to my home market, India, Fiat chose the former miss-Universe Lara Dutta as a brand ambassador for the 500. Now, I do respect this lady for her beauty and intellect, but somehow she just does not seem to be the right representative for the car. Earlier, the Palio was endorsed by cricketing legend Sachin Tendulkar. And Sachin autographed bright yellow Palios were quite common in the market - meaning the campaign was a success. However, I cannot say the same for the 500, which was introduced in the Indian market in 2008. There have not been much buzz about the 500 in the Indian market (mostly due to its ostentatious pricing) and I seriously doubt that the 500 will be branded as the rich lady's toy car with the present brand ambassador. Could not have Fiat roped in auto enthusiast Sanjay Dutt to be the brand ambassador instead?

Happy 2012!

Warm New Year wishes to you all! I hope that this year brings a lot of peace and happiness in your lives and sees your dreams come true.

Also, let us hope that we see a lot of action in the automotive industry this year in terms of new technology, models, better fuel efficiency and safer cars.

Electric vehicles in India

Any topic on electric vehicles (EVs) in India would invariably veer (at least for now) toward the Reva, by the Mahindra and Mahindra and Maini group joint-venture (Mahindra Reva Electric Vehicles Private Limited). Founded in 1994 by Sudarshan Maini and based in Bangalore, the Reva Electric Car Company, is involved in designing and manufacturing of compact EVs. In fact, the Reva (the present generation called the REVAi) is the largest selling EV in the world, not because of its range (80 kilometer) or its looks, but simply because of its price. The Reva (priced at approximately US$7,000) is five to 142 times cheaper than the Nissan Leaf and the Tesla Roadster, respectively!

Anyway, this write-up is not about the Reva, but to take the Reva as an example and try and discuss the ‘plight’ of EVs in India.

I have stayed in Bangalore for about four years before moving up north to the Delhi NCR. During my stay in Bangalore, the Reva was a pretty common sight, and I would see at least one of those EVs on my way to office or back. However, in the national capital region, I have failed to spot a single Reva in the one and a half years that I have been here. This made me ponder about this disparity, because Delhi and its satellite townships are a fair representation on the automotive scene in India.

I was fairly surprised and began thinking about why there is this divide in accepting an EV across different cities. And also on the fact that if there were to be more EVs in India, would there be a difference in mass acceptance, based on demographics, customer taste and infrastructure availability, or rather the lack of it.

Here is what I figured out:

• Infrastructure: In Delhi, people fight for parking space. They get physically violent and at times your car is parked more than 300 meters from where you stay. In Bangalore, people usually have verbal altercations and generally mange to park their cars where they can see it. In some places in Delhi, the lanes are so narrow that it is almost impossible to park your car next to your house without causing an impediment to traffic. So, keeping an EV in Delhi can be quite a task, because recharging it would be a nightmare. Even office parking slots do not provide charging points for EVs. Essentially, it is much more practical to own and operate an EV in Bangalore, compared to Delhi.

Also, after sales and service for the Reva is negligible, if not altogether absent. As a consumer, everybody expects their car to be taken care of in an authorised service station for at least three years post-purchase. Mahindra and Reva need to increase the number of after sales service centers for people to feel comfortable buying their product. In fact, both Mahindra and Reva need to leverage the Mahindra service network and consciously draw consumers’ attention to the fact that the Mahindra network is there to support Reva consumers.

• Power scenario: In the satellite townships of Delhi, such as Gurgaon, power supply is very erratic. Power-cuts last up to eight hours at a stretch, and eight-hour-long power-cuts are not one-off incidents, they happen on a weekly basis. So, if you are in Gurgaon, even if you could park your EV in your living room, you still would not be able to recharge its batteries. Comparatively, Bangalore has fewer power-cuts and they generally do not last more than an hour. Also, electricity is far dearer in the NCR region – it could go up to INR7 per unit at places.
• Customer taste and requirement: This is a very subjective factor and it holds true not only for EVs, but all automobiles in general. For instance, you will see more white cars up north and more black cars down south. Indian consumers have different preferences for different colors in different regions. Coming back to EVs, no doubt the Reva back-up as the second car in all households in Bangalore, but in Delhi, the second car would be a Chevrolet Beat, or even a Tata Nano, but never a Reva. Quite possibly, because of the other factors I mentioned that go against the Reva, but also possibly because the Reva, is not up to the taste of consumers in the North. Bigger cars still hold an appeal up North. (You might want to argue about the Nano in the previous sentence; but the Nano is much roomier and has a sense of pride in ownership due to all the news it generated and because it is from Tata)
• Government initiative: It is a known fact that new technology cannot find mass-acceptance without government support. True that the Indian government has started, or at least given thought, to providing subsidies for EV and alternate powertrain suppliers and manufacturers. That is the first step and not sufficient enough to drive EV acceptance in India. Consumers should also benefit for choosing lesser polluting vehicles. Also, state governments should do away with taxes and levies on selling EVs. This will bring a price uniformity for EVs across states.

Therefore, I think that for EVs to be successful in India, we need to consider different markets (read cities) as unique and offer different solutions for the mass acceptance of the EV. A solution for the success of EVs in Pune, will not work in Chennai. India needs to be segregated on the basis of the different parameters mentioned above. However, on a national level, the issues of power and infrastructure shortage, state government encouragement, and the likes will still act against the interest of EVs. For that matter, pure-play EVs might not be the solution to clean transportation in India at all. Maybe, we need to replicate the success of CNG buses in the passenger vehicle domain, or maybe, we need to think of more indigenous alternate fuels, such as biogas. In fact, cheaper, cleaner and efficient last-mile connectivity could become a panacea for traffic congestion and vehicle pollution in India. We could, in theory, bypass the trials of alternate powertrain and be an example in efficient public transportation solutions, just like we bypassed the muscle car era and hopped straight on to compact cars, which are only beginning to make their mark in older and more mature automotive markets.