General Motors came to India with its Opel brand in 1996. Being a contemporary luxury car, Opel Astra became an instant hit. But the party got over as soon as people started realizing the maintenance cost of the German Astra. GM introduced Corsa which proved to have the same problem. Opel Vectra, not to mention, never sold in encouraging numbers. Despite of being fantastic products, all the Opel cars were discontinued one after the other. Blame high maintenance cost for their disappearance.
Though Opel failed in India, its failure helped GM understand the Indian car market better. In 2003, GM brought in its highly popular brand - Chevrolet and the first car in India to wear the famed bow-tie was Optra. The Korean Optra (it was afterall a Daewoo Lacetti) gave Chevy a good start in India purely because of its affordable-luxury-car image. GM was still learning and it made another mistake after Opel. GM introduced Japanese Forester in India. Imported spares for Forester turned out to be costlier than Mercedes-Benz C-Class and were made available in a couple of weeks' time! Spares-cost can be considered as one of the prime reasons for the withdrawal of Forester from Indian market.
Prior to Spark’s launch, there were rumors that GM is struggling in India and if Spark doesn’t click, it might leave India forever. I am not saying that I believed them then but there were not enough reasons for discarding them completely either. Spark got launched. It had everything a person desires in a small car, like good engine, peppiness, style, fuel economy and was well priced. All these things might not have made Spark a best-seller as “maintenance-cost†factor could prove a silent killer again. But GM had read Indian minds till then and introduced the magic, “Chevrolet Promiseâ€, the fixed-cost maintenance plan. Now you could buy a Chevy and rest assured for as long as three years as far as maintenance is concerned. It helped GM transpire confidence to the Indian car buyers. Call it GM’s aggression, marketing strategy or learning but GM is doing pretty well now. GM has Spark, U-VA, Aveo, Tavera, SRV, Optra Magnum and Captiva in its product line-up today. General Motors registered its ever highest sales in March 2008 this year.
Selling cars at cheap prices help in overcoming initial resistance but offering cheap maintenance help in keeping momentum high. Car manufacturers like Maruti, Hyundai and Honda had understood it long back and hence could reign the Indian car industry. General Motors has touched the right string, a bit late though. In India, GM is no more considered to be the American auto-maker which believes in making huge profits in after-sales-services. General Motors has plans to bring yet another small car in India. This will further help GM in increasing its market share. No matter how are you doing worldwide, how good your products are, but if you want to go big in India, you will have to set product prices and maintenance plans right. GM has got it, is Ford listening?
