With over 1.3 Billion people, India is the second most populated country in the world and when there are so many people, almost everything is larger than life here. So naturally, it is not a surprise that India is the fifth largest automobile market in the world in terms of sales. Brands like Maruti Suzuki, Hyundai, Tata Motors are already a hit in this country and are making heads turns of their customers with their amazing automobiles.
While some brands experience immense success in the country, some of them got exposed to failure as well. In this industry, some automakers failed to make a place in the fifth-largest automobile market in the world. This article will talk about all those automakers that failed to set their foot in India and the reason behind it. So without any further ado, let’s get started.
“Car designers are just going to have to come up with an automobile that outlasts the payments.”
Why Automakers are Struggling to Succeed in India?
Two brands that can set their name on the top automakers' list with their powerful performance in the country are Honda and Hyundai. It wouldn’t be wrong to say that they are ruling the Indian market.
On the other hand, there are some of the automakers who are struggling in our country to lay their foundation. Some of the reasons for this are listed down below:
- Increasing fuel price is said to be one reason.
- It is also revealed that some concessional GST rate was not allowed by the Government.
- One of the reasons is also the higher road taxes.
- India is a price-sensitive market and people mostly focus on small cars here, for their needs. A company has to be very precise about this.
- Planning of the products by the automakers was poor and naturally, they were not able to adapt to the market.
- Another reason is some of the companies are not able to judge the growth of India's automobile market.
Automakers That Failed In India
India is a country where a single company dominates more than a quarter of its sales. Maruti Suzuki and Hyundai are the top two companies that dominate the automobile industry. There are some global known brands who failed to set their foot in India and we are here to discuss them.
The legendary American Cruiser bike was not able to set up its brand in the Indian market. It is said that in 10 years, Harley Davidson was able to sell a little more than 27,000 units in the country. While its competitor Royal Enfield sells double the number of bikes every month. Some of the reason for this is down below:
Not the Right Market
India is a country that is considered one of the biggest two-wheeler markets in the world, but it is not a market for big bikes. In India, over 90% of two-wheelers are small motorcycles and scooters as they are easy to maintain as well.
Another vital reason has to be the price; the most affordable bike from this brand costs somewhat 4.7 Lakh. That kind of pricing is extremely high for the people living in a country like India.
Royal Enfield proved to be a better companion for the Indian customers over Harley Davidson, in terms of price, lighter in weight, and easier to maintain.
High Repair Cost
India’s roads are somehow filled with potholes and Harley Davidson bikes are quite expensive to repair if it is damaged by potholes.
This American multinational automotive manufacturing company is considered as one of the best and biggest manufacturers in the country but unfortunately, it was not able to establish its power in India. When General Motors first came to India, it was able to sell quite a decent number of cars but with time, the average popularity started declining. So, General Motors 2017 decided to close its operation in India. Some of the reasons that it failed in India are:
Failed Business Strategy
The management of a company is one of the most important factors for its survival. As per reports, decisions regarding the company took a lot of time which resulted in not being able to reach a proper strategy for the business at a time.
Weak Dealership Networks
The dealership networks of General Motors were quite weak. The customers’ main issue was with the dealerships as they were not that confident regarding the products of GM.
Bad Resale Value
GM launched over 20 different models in 20 years and also withdrew 10 of them. Naturally, the change of the model lineup affected the resale value badly, and the customer service was also not up to the mark.
General Motors' technology was not that modern. Reports said that there are cars that barely pass the emission tests. Other brands focused on updating the technology of their car and were quite fierce competitors for GM.
Failed to Attract the Right Audience
GM never introduced top models that are famous in other countries in India. Naturally, it was not able to attract the attention of people in India.
Probably one of the biggest shocks the Indian automobile market got when Ford decided to stop making cars in India. The products were well made and were affordable to buy as well. Still, it failed to crack the Indian market, and the reasons are down below:
Sudden Rise in the Price Factor
The sudden rise in the price factor of Ford is one of the reasons, the company lost its place in the Indian market, the maintenance cost started rising of the new models. This high ownership cost became a problem for the customers; which also resulted in decreased sales.
Not Concentrated on the Right Models
Ford didn't concentrate on SUV when it started getting momentum. Thus it misses out on a great opportunity to use the model to encourage the brand in the Indian market.
Wrong Investment Decisions
The cost structure is another problem, Ford invested where it was not needed, for example, they invested in world-class factories. It was not able to meet the expectations of its potential customers.
Lack of Proper Marketing
Ford slugged in making its brand big in India, while other brands like Hyundai worked 24/7. This is one of the reasons, plus the aggression that was needed for marketing, was missing in Ford's startegy.
The Automobile market in India is a huge one, one needs to concentrate on various structures to make their brand a successful one in the country. The automakers that failed in this country are a big lesson for those automakers that wanted to make the 5th largest automobile market a hub for their brand.
Which Indian car companies are closing?
Ford, General Motors, Fiat, and Harley had exited the Indian automotive market.
Which car company stopped making cars in India?
Ford India closed its operation in 2021 due to huge mounting losses.