Forsaking image for sales?

When Tata launched the Nano and followed it up a few years later with its next big offering, the Aria, nobody questioned the vast segment/price gap. When Skoda, Chevrolet, Toyota and Honda – traditionally known for their sedan cars, started manufacturing smaller hatchbacks, nobody bat an eyelid. It’s simply assumed that such ‘day-to-day’ automobile brands will always try and manufacture the broadest range of product, to suit every segment, trying to capture maximum market share.

Yet what happens when we talk about the less frequent and more cliquish car brands like BMW, Mercedes and Audi. Far from the common man’s best friend, these cars have built an image around being outrageously expensive, technologically over the top and in most cases genuine symbols of status. So why is it then, that every time you step onto the road today, you find the BMW X1 and Audi A4 are as trendy as the name Sandra in the popular Bombay suburb of Bandra?

The two entry-level cars are being snapped up by just about anybody these days and sales for the two companies are skyrocketing. Outing Mercedes as the top Indian luxury-auto seller in 2009, BMW managed a total sales of 6, 246 units in 2010 (8 percent more than Mercedes), while during the January to July quarter this year, Mercedes sold only 3,991 units; BMW ended up selling 5,364 units (40% of which were the X1).  Mercedes’ next move? To bring 10 new variants to India by 2015. Most of them cheaper and targeted at the upper middle class, as a counter to the BMW X1.

“Our cars are positioned to attract all generations of people who aspire to have a BMW. We have no problem in selling cars to uncles, fathers, mothers and pops. Maybe that is the reason for our success,” said BMW India President, Andreas Schaaf, in a recent interview. But with such unique branded cars becoming rather ubiquitous, one can’t help but wonder if entering the market with cheaper options, to boost sales, is really healthy for the brand’s image on a long term basis.  Would buying a BMW / Mercedes / Audi still be as special, when every second person has it?

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