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The Rediff Business Special/Craze for cars

1999 -- An 'Indi-car' Story

Chris Ann Fichardo in Bombay

A demand-supply equation that would delight any manufacturer: over 100,000 people, with cheques for full payment in hand, vie to buy 10,000 units -- all in a week's time. To be more precise, in a recession-like time, when the argument is that the services sector has an edge over the manufacturing sector.

Consider these: growth in the auto sector has dropped from about 25 per cent in the early 1990s to around seven per cent in 1997-98. And in the first six months of fiscal 1997-98, growth was zero. Demand has also dropped by 18-20 per cent during the third quarter of fiscal 1998-99.

But then, truck major Telco's Indica is no ordinary car, so to say, because it came into this world with the reputation of being the first swadeshi car. The four-wheel small wonder, automotive experts predicted, will smoothly whiz past the Marutis and the Matizes and the Santros, not even leaving behind a trail of tyre-prints on the potholes of Indian roads.

Sure enough, the euphoria that enveloped the bookings which began on January 22 -- the Indica was kept on display from the New Year's Day -- convinced Rahul Dutia, senior manager, Autoriders India, Bombay's leading car dealer, that the long-awaited moment had indeed arrived.

Dutia recalls, "The first two days were really hectic. Almost 1,500 people came in every day to check out the Indica. During the three weeks that it was in the showroom, at least 25,000 prospective buyers had a dekko at the car."

V P Ajitkumar, general manager, Concorde Motors, a 50-50 retail arm of Telco and Jardine International, remembers that when the Indica was launched, the showroom had to be kept open till 11 pm every day to accommodate the heavy turnout of prospective buyers and non-buyers. "Yet, we used to get numerous calls requesting us to keep the showroom open for 15 minutes longer. And when we offered the test drives, the response was so overwhelming that we had to eventually discontinue the drives."

Automotive dealers say Telco has done well to leverage the fact that the Indica is indigenous. Apparently, the name Indica is an amalgam of India and car, or India's car. In all, 50,000 Indica units are expected to roll out of Telco's Pune plant by May 1999.

Ajitkumar says initial delays have been overcome and the supply of the Indica has been streamlined. "Till today (March 22), Concorde has sold all of its full allocation of 300 units of Telco's first lot of 10,000."

However, Telco itself expects to sell only 2,500 units by the end of current fiscal, which would be a mere 25 per cent of its ''informal sales target'' of 10,000 units set for March 31, 1999.

The company, in fact, would achieve the 10,000 units sales figure only in May, company sources say.

Confirming this, Rajiv Dube, Telco's general manager (commercial), says around 4,000 units each would be sold in April and May this year, "which will help us touch the 10,000 units figure".

The delay has been on account of some vendor problems, ''which have now been sorted''.

''The problems are behind us now and we are now all set to go ahead with our delivery plans,'' Dube adds.

''Besides, we are looking at putting a quality product in the market. We are trying to be doubly sure that the car should not give any problems. For us, now numbers do not matter.... We are more concerned about quality,'' he adds.

Dube, however, sought to allay fears that the company's maiden product in the passenger car segment has run into problems and delivery schedules can not be met. ''The cars have already reached the showrooms and are being delivered to the customers as per schedule. Individual dealers had some small problems with their regional transport authorities which have also been sorted out. There are absolutely no problems on the delivery front.''

The response to the car, he says, has been overwhelming. As mentioned earlier, Telco had collected around 115,000 bookings for the Indica, of which 60,000 have been retained for deliveries till the end of 1999-2000 fiscal. The company aims to produce 150,000 cars in fiscal 2000-2001.

Telco has pinned all hopes on the car with its chairman Ratan Tata even stating that the Indica would steer the company out of the red. Indica, sources say, is not the end of the road for Telco as it is presently working on a mid-size car, which would be the company's second offering for the Indian passenger car market.

The company would break-even with its investments on the Indica project at 68,000 units.

Be that as it may. Why are consumers keen on the Indica in a market full of choices ranging from partly desi models like Maruti to avowedly foreign brands like Matiz? Market sources say two Ps are at work: price and patriotism. (In the small car segment, Santro's price is Rs 299,000, Matiz's Rs 355,000 and Maruti's Rs 209,000.)

"A 1400cc a/c car like the Indica at Rs 300,000 is too good a deal," says Mahish Chawla, the 29-year-old industrial marketing consultant. "Normally, a car with Indica's capacity comes with a higher price tag like that of the Ceilo, the Esteem and the Ford."

Agrees Leon de Souza, the 26-year old executive from a leading financial institution. Slipping in to the Indica front-seat as if he were a bird returning to its nest, he gleefully lays his hands on the wheel, turns the ignition key on, slides the gears and disappears. Where is he? "He's gone, on a 'test drive','' someone explains.

In a short while, de Souza materialises, visibly elated. Will the Indica pass the "test"? De Souza smiles, and pronounces the verdict: "Yup." Yah? "Yah. It has spacious interiors, excellent braking mechanism... the overall appearance has won me over."

Concurs Vijay Mehta, a 49-year-old businessman. "The Indica's allure lies in the fact that it is 'Indian' and offers good value for money."

According to Duhia, who has seen the Indian car market evolve over three decades, Indians have suddenly become very car-savvy. "Earlier there were just two cars on the road. The Ambassador and the Fiat. And you had to wait for nearly 5-6 years to get a new car. Now the choice is much more, with smaller price tags. The customer is quite demanding and knowledgeable. Gone are the days when you could deliver vehicles without step-ins and still get a buyer."

It is not as if the market has become perfect overnight. Prospective car-buyers still express concern at the after-sales service or the lack of it.

De Souza, for one, remembers that Telco's after-sales service for other models in the past was not up to the mark, especially for the first batch. He cites the instance of the Tata Sierra owners who, fed up with the lack of after-sales service, formed an association to seek legal redress for their grievances. "A Zen or any other Maruti car, I'm sure, will get service no matter where the customer is in the country," he says.

An aside: Telco's 'Safari' was today adjudged the most appealing multi-utility vehicle by JD Power and Associates for the year 1998 in its India Appeal study.

While the Indica continues to evoke interest among car-lovers, not everyone is rushing in with cheques in hand. Chawla says he might buy the Indica by 1999-end. "By then, the teething problems would be sorted out."

Telco dealers say they are geared to overcome this negative perception among the customers. To start with, three full-fledged service stations have been opened in Bombay itself. On its part, Telco has assured that its products will be hassle-free.

As Mehta says, only time -- and the Indian roads -- will prove whether the Tata group company can match the demand with efficient supply.

Additional reportage: UNI

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