Three latest entrants in India’s small car market have set the fire in industry in terms of pricing. First Maruti Suzuki, the biggest carmaker in India reshaped its flagging model Versa into Eeco at mouth watering Rs 2.50 lacs and then Old American war horses, GM and Ford bringing out there new products i.e. Beat and Figo respectively at Rs 3.49 lacs (ex showroom price). This is seems to be a beginning of a price war in India which will reshape the industry as all major global players are now getting ready to take their part of Indian Automotive Industry Pie.
Well lower prices like these are not reached through one day of innovation by the marketing and finance guys in these organisations. It is the continuous hard work of the supply chain of these companies and shows the strength of our low cost automotive component supplier base.
The latest price wars will only put a lot of pressure on the buyers in these organisations to purchase at the lowest possible prices. The overall scenario looks very competitive as not only hard negotiation will be there to reduce cost but there will be smart new ideas that will be generated to make the cost of producing these components cheaper without effecting quality. This will be in turn enhances the overall capabilities of Indian part manufacturer to compete globally.
Already GM, Ford, Chrysler, Volvo and many other companies were aggressively scouting for Indian component suppliers for their global requirements and with expansion of Domestic Indian automotive market the chances that the Indian component supply base will become more stronger and technically capable to achieve this goal.
The whole game plan (of low cost Indian component supply base emerging stronger) becomes dynamic with the arrival of bigger and technologically advanced component suppliers in India in order to tap growing Indian market. These new players like American Axles and Magneti Marelli are technologically advance and will be more adaptable to changes happening in Indian market.
In the midst of all these development it will be exciting for every Automotive Supply Chain Professional in India to manage right product at a right time but at the cheapest possible price.
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This is a great trend leading to multiple avantages to Indian middle class & automotive ancillary companies. However I am afraid if the already congested Indian road will cope up the increased laod of cars. Becasue of this price war there will be further reduction in car prices many two wheeeler owners will tend to switch due to redicing gap between car & bike prices. I think Indian govt. must gear up to solve the trafic problem to sustain this momentum or the country will end up spending the foreign exchange earned on the auto exports on fuel imports!
ReplyDeleteHarshad