Indica V2. That is how they branded the Indica when they came back in the market with a debugged product and wanted to tell the customers that they had something more to offer in the product.
The message was simple, and claims were backed by actual product improvements. The strategy clicked, and the Indica entered a new phase in its lifecycle. Today, it is the largest selling car in its segment.
What Indian car market is witnessing today is also a new phase after five most eventful years in the history of Indian automobile industry, the car segment in particular. These five years have changed the way we looked at car business: 'We the Industry Wallahs' and 'We the Customers.'
These years brought in new products, new brands, new campaigns and a lot of noise at the marketplace. But behind all these hullabaloo the biggest challenge in front of carmakers was the creation of a robust sales and service network across the country to service lakhs of new and would-be customers.
Due to the image of the car dealership business created by the good old shortage days, many local businessmen flocked in to open up car dealerships. Many entrepreneurs came in, apart from the ones who were already in the automobile dealership business. Even manufacturers encouraged these freshers for their bad experiences with old dealerships and the aggressive, market-savvy approach of these entrepreneurs. Then began the number game and the race to become the market leader, the segment leader, and so on. The results, we all know.
Now, after the dust has started settling and the segmental growth has flattened - due to a sluggish consumer sentiment - the task ahead of carmakers is to differentiate themselves. The difficult part here is that the products still are halfway on their lifecycles and, hence, do not leave much scope for completely new offerings.
Fortunately in the automobile business, the differentiation does not happen at the product layer alone. It does through the complete experience of the customers, the experience at the time of purchase, the experience with the product and the experience in after-sales service or other interactions with the manufacturers or their dealers.
So, as a key differentiation initiative, carmakers now need to look at the retail processes or the processes at the customer interface that shape up the quality of customer experience. Unfortunately, there is nothing great to write home about as far as this wholesome performance of carmakers is concerned.
Agencies like JD Power, which track the customer satisfaction indices of various car brands and carmakers, are here for quite sometime rating all of them. These ratings, though are not the exact representation of the customer satisfaction levels, give a fair idea of the same in terms of relative performance trends both on the time and competition scales.
Though the industry average on the JD Power CSI (customer satisfaction index), which represents the levels of customer satisfaction measured at the after-sales service layer, has gone up from 109 to 113 in the last three years, the top score has actually gone down from 121 to 119. JD Power SSI (sales satisfaction index), which represents satisfaction at the sales layer, has industry average stagnant at 103 for two years with marginal improvement in top score from 109 to 112.
While a surge in customer expectations is to an extent responsible for this, the carmakers have not been able to take focussed retail process-oriented initiatives either. This gets reflected in the fact that today most of the carmakers either have implemented, or are in the process of implementing, the integrated dealer management systems in order to automate the processes at the dealerships, but the actual usage of the same is no where close to satisfactory.
Globally, one of the key focus areas for carmakers today is CRM and retail process improvement as they find it to be in their strategic interests. This becomes more important looking at the fact that despite being big-size businesses, auto dealerships do not attract a very high quality of manpower and the general motivation levels among these people are low as compared to their counterparts in other service-oriented businesses such as telecom or credit cards. The better systems and processes here have to compensate for the lacunae on the people front.
While the achievement of Tata Engineering and Hyundai in creating a network of over 100 dealerships and 200 authorised service points each is commendable, the real challenge that lies ahead in front of the carmakers as a whole is putting up well-built systems and efficient, customer-friendly processes at the dealerships. This definitely is an uphill task looking at the viability crisis that dealerships are facing because of high operating costs, over-competition and erosion in retail margins.
This kind of initiative has the potential of becoming the visible differentiator, thereby rendering competitive advantage to a carmaker. This would help carmakers lure new customers and retain the existing ones. The start may be difficult: it would require some expenditure too, but we do not have a choice.
Customers are very demanding - they cannot be lured by 'More Car' anymore; we have to give them 'More Pyaar Per Car' also. So, fasten your seatbelts, we are entering the second phase run in this emerging market. Here comes India V2.