Vice-president and General Manager | 22 Sep 2004
“General Motors is positioned as a mature and responsible car manufacturer, which offers great value-for-money products to its customers. The company leverages its global expertise to manufacture and market well engineered and safe products through its well-established retail network that provide an excellent ownership experience to its customers.”
The General Motors India story dates back to the 1920s. The global car major has the singular distinction of building the first car manufacturing plant in India in 1928. The first run for the automobile giant saw General Motors gain iconic status for its Chevy and Impala. But the journey thereafter, especially in the liberalised Indian auto market, has not been a cakewalk.
Keen to achieve a proud place in the ever-growing Indian car market, GM India has embarked on a new initiative. It has upped the ante with the launch of the Chevrolet Optra, the celebrated luxury sedan that received an encouraging response from pundits as also consumers. Buoyed by this, the world’s largest car maker has just announced a second honeymoon gift offer for its Optra buyers in India.
In an interview with Rakesh Khar, Programme Director, Journalism and Mass Communication Programme, Jaipuria Institute of Management, Noida, Amit Dutta, Vice-president and General Manager, General Motors India, unveils the latest India gameplan to exchange4media. Excerpts:
Q. Given its strong pedigree, GM should have been the obvious No. 1 automotive player in India today. How would you describe your second innings in India?
Slow and steady. We have been cautious with our investments and have steadily built our presence in the Asia Pacific region. Along with China, the corporation is now focusing on the Indian market. We have grown strongly in the past 18 months and have an aggressive plan for the next five years.
Q. What is the positioning of General Motors as a brand in India? Do you see today a distinct place for yourself in the Indian car market?
General Motors is positioned as a mature and responsible car manufacturer, which offers great value-for-money products to its customers. The company leverages its global expertise to manufacture and market well engineered and safe products through its well-established retail network that provide an excellent ownership experience to its customers.
Q. The golden rule in any business, more so in the fiercely competitive passenger car business, is that if you are not the No. 1 brand in your business, you stay in the market at your own peril. Does GM India subscribe to the number game theory?
Definitely not. The Indian market is growing at a healthy pace and there is adequate room for several players. After having made a cautious start we now have an aggressive plan in which we will bring in several new state-of-the-art products to this market. We intend to be a profitable organisation this year onwards.
Q. Besides the high-end Chevrolet Tavera and Optra, GM India manufactures the Opel Corsa, Corsa Sail and Swing at its facility in Halol, Gujarat. GM India also imports Opel Vectra and Chevorolet Forester. How would you define your product mix in India?
Our target is to offer a choice of products to our customers to match their different needs and budgets. Being the world’s largest car manufacturer, we have access to a range of products through our global alliances. We are already present in most segments and will shortly have products in additional segments. However, we are focusing on the fast growing MPV segment with the Chevrolet Tavera and have invested substantially in this product line. We look for customers for life who will have a choice of products to buy from our stable.
Q. Your product mix -- Corsa Sail to Optra -- signals a presence in almost all emerging key categories of the car business in India. Doesn’t this mark a shift in strategy from being a niche player to a volume player?
Yes, we are looking at becoming a volume player. We have already registered a growth of 70 per cent year to date. As mentioned earlier, we have launched the Tavera this year in the fast growing MPV segment and are looking at big numbers from this car line. We already have a healthy waitlist for this product and are in the process of ramping up our manufacturing capacity to meet the market demand.
Q. Volumes drive the auto business in India but high volumes obtain largely in the entry segment, which is highly price sensitive. Has the absence of a product there hurt General Motors India?
GM has been cautious with its investments and has kept its costs under control. Hence, by not having a volume product we have not been significantly disadvantaged. Our strategy so far has been deliberate.
Q. India is a price sensitive market. Your competition has developed customised products and the strategy that appears to be working well in India. Do you have an India-specific product in the pipeline to cater to the high volume segment?
Tavera is a classic case of an India-specific product. Though it is an international product, the car has been totally re-engineered for Indian market requirements. At the start of production, we had a localisation level of 85 per cent that is likely to go up to 93 per cent by the end of this year. This product will help us move from a niche player to a volume player. Even Optra has been re-engineered for our market conditions.
Q. The high-end D-segment is also witnessing a lot of action. You have upped the ante with a high-pitch Tavera and Optra launch? What has been the response?
The response to Tavera has been fantastic. Our premium-end variants have a waitlist of more than three months and in certain markets we have had to stop taking additional orders. The car has also delighted customers with its excellent fuel efficiency, ride quality and feature package. The car scores well on exterior styling and appeal and provides best in class air-conditioning, which is a critical customer requirement in our country.
Again, Optra has also seen a successful run and has been rated as the most comfortable car across all segments in the September ‘04 issue of ‘Overdrive’. Optra has beaten cars in a segment above on this vital parameter. Besides, we have been the market leader in terms of sales numbers in certain months. We offer two engine options and several variants to span a wide price segment. Optra has bagged five awards in its first year since launch. The top of the line variant of Optra with leather, sunroof and a five-CD changer continues to be a high seller.
Q. June saw the Chevrolet Optra emerge as the market leader in its class. But thereafter, the going has got tough with competition. What is the long-term marketing strategy to build Optra as the market leader in its class?
Sustained brand building efforts coupled with intensive ground-level activity has ensured that Optra has remained among the top two players in its segment. We have refreshed the product through continuous product improvements and have emerged as segment leader in fuel efficiency. We recently launched a limited edition of 150 cars, which has received a very positive response and given us rich dividend in terms of brand building and imagery.
A product refreshment plan will ensure that we remain competitive and are ready to meet future challenges in this segment. We also have a regular Customer Relation Management programme whereby existing customers are offered loyalty programmes and great offers. So far, we have organised six Optra Max Mileage Rally meets where Optra customers compete to extract the best fuel efficiency out of their cars and all participants are treated to an overnight stay at an exotic locale with an evening of entertainment. The winners of these rallies are given healthy cash rewards. These vents go a long way in building goodwill and brand loyalty.
Q. Is it a good idea to have six variants in one category as in the case of the Tavera? Does it not run the risk of adding to the clutter?
Segment-needs and budgets are specific and a suitable variant strategy is inevitably required to meet different segment-needs and to be a volume player in the segment. The variants were decided after considerable research. They have been targeted at different segments and we presently witness a healthy mix. As this segment evolves we will rationalise the variant strategy and add or delete variants to meet market requirements.
We have put in place a customer contact programme where we interact with customers in groups as well at an individual level at regular intervals to assess their needs and overall experience with our product.
Q. What kind of a connect does General Motors India enjoy with the Indian car consumer?
The Indian car consumer identifies strongly with the Chevrolet brand, which has had a long presence in this market. This brand has had great exposure through Bollywood movies and is perceived as a premium brand. There is high brand recall and there is a sense of warmth and reliability associated with the brand.
Q. How do you profile your typical Indian consumer?
The typical Indian consumer looks for value and does not mind paying a little more for it. Fuel efficiency, airconditioning and reliability along with ease of service and low cost of ownership are major considerations during the purchase process in India.