Automotive Industry

The first car came to India towards the end of the end of the nineteenth century. This distinction goes to Mumbai than known as Bombay where it appeared in 1898. Soon three more cars followed and by 1910 the number of cars on the road in India had jumped to 1025.

After that first import the Indian Auto industry remained static for a long time till Independence. Most of the cars were imported from UK and Europe and the elite consisting of Maharajas and rich business men were the main users. The Mercedes was the car most beloved by Royalty and a lot many of them found their way to India from Germany.

With the dawn of Independence in 1947 the situation did not change much, as the country adopted a socialistic policy and cars were classified as a luxury. With the result that for almost three decades the Indian car industry was at a standstill. The Government banned imports and in the name of self reliance gave licenses only to 3 car manufacturers like Hindustan Motors, Premier Automobiles and Standard motors to manufacture cars in India. The models churned out were obselete and in a controlled economy these car manufacturers thrived.

The son of India Gandhi Sanjay must take some credit for where India is today. In late seventies and early eighties he experimented with a small car called the Maruti. An untimely death in an air accident put paid to his dreams. But the government stepped in and invited Suzuki of Japan to make small cars. These cars were a runaway success and the earlier manufacturers of the obsolete cars fell by the wayside. In due course premier and Standard shut shop and only the Birla Hindustan motors is barely surviving. Read the rest of this entry »

What a year 2009 was for the once dominant and powerful auto industry. Saturn and Pontiac are out. Fiat and Tesla are in. Two of the Big 3 ’survived’ bankruptcy – and the verdict is still out on their long term fiscal viability. Nearly 1800 dealerships have or will close by this time next year. Ten million new cars were sold in 2008 versus 16 million in 2007, and it looks like this year’s results will be even worse. The economic and human trajectory of this demise, collapse and to a high degree, mismanagement, of the domestic leaders has yet to be truly calculated.

In the midst of such a shocking 12 months, what does the industry do to create a transformative working and healthy model? Is there enough ‘forward thinking’ in the minds of the multi-generational industry leaders and dealer owners that can shift this industry into the marketing giant it once was? Are there enough players to transcend the old ways of doing things with a new paradigm that mirror today’s sophisticated and transparent buying options now available to 21st century consumers?

To help get a jump start, here are six transformative new business practices that will shake up the old and offer the auto industry an opportunity to land squarely on all fours.

1. Lose the ‘tude, Dude

Car buyers have very little interest in negotiating. In fact, most loathe it. Women, for example, often have powerful positions at her workplace. While an estimated 80% of women initiate and motivate the family car purchase, many of those women expect their significant other or, the nearest man, to go with them to the dealership to ‘buy the car’. Read the rest of this entry »

This year has been tough on the auto industry worldwide, for the most part due to rising fuel prices. The North American automobile industry has been especially hit.

The biggest buzz seems to have sprung form the Meryl Lynch report, and the idea that they couldn’t rule out bankruptcy for the world’s largest automobile manufacturer, General Motors. At the same time the company’s stocks fell to a 54-year low. And all of it occurred at a time when GM reported uninspiring sales figures (i.e. 265,937) in June this year.

In order to avoid bankruptcy, GM would need to raise $15 billion in cash as has been said. While the company hasn’t responded to the report, but it thinks that it’s got enough cash for 2008 and that it would take the required measures if needed.

However, it’s not just GM that took the hit, Toyota’s sales also came down by over 21%, while Ford’s figures showed a drop of 28.1%. For the most part the mechanism seems to be the same, that is lower demand for gas-guzzlers owing to high fuel prices.

Meanwhile in Canada the trend has been replicated with the auto sales plummeting by 5.7 percent from last year to reach 159,500 vehicles in June. The drop is significantly higher than the 0.5 percent fall in May. Read the rest of this entry »