Last week, when General Motors India Pvt. Ltd launched its new sedan, the Chevrolet Cruze, the timing was just right—poised to catch the climax of the festive season and bargain-hunting frenzy.
The buzz around this latest model quickly focused on its price—at Rs10.99 lakh for the bare-bones diesel version, it is the cheapest car in the premium D segment. The Cruze is not the only new offering from GM for the Indian market. In early 2010, a new small car—the Beat—is expected to be launched. It will be followed later in the year by an eco-friendly electric car in association with Reva Electric Car Co. Pvt. Ltd. Besides, China’s largest auto maker SAIC Motor Co. Ltd is set to buy a stake in GM India, securing an entry into the Indian market.
The first products to come out of this venture are likely to be another small car or light trucks. New and proposed launches apart, September was GM’s best month yet in India, with 7,654 units sold. All this action makes it hard to believe that a mere four months ago, serious doubts were being raised over the future of GM in India. Shortly after declaring bankruptcy in June, the US operation of GM sold marquee brands such as the Hummer and Saab. Having failed to find a buyer for its Saturn unit, the company seems on course to liquidate the brand by October 2010. While not directly affected by these developments, they nevertheless cast a shadow on GM India. Ankush Arora, vice-president, sales, marketing and after-sales, GM India, recalls, “It did have an impact on consumer sentiment and consumer confidence.”
Cruising in: GM India vice-president, sales, marketing and after-sales Ankush Arora and managing director Karl Slym (right) at the launch of the Chevrolet Cruze last week in New Delhi. Vijay Verma / PTI
Except that local market conditions had perhaps given GM India more of a fighting chance. The company was saddled with negative perceptions about American cars being very expensive to purchase and maintain. And so it had already fired its first salvo in changing the minds of Indian consumers—the Chevrolet promise campaign which began in mid-2008 and offered three years of free service. Given the seriousness of the message, GM India opted to bring its managing director, British expatriate Karl Slym, instead of celebrities on its roster such as Saif Ali Khan and Rani Mukherjee. In the months leading up to and immediately after the bankruptcy, the campaign also served the purpose of reassuring consumers that GM was here to stay.
In June, GM launched its “There For You, There For India” initiative, encompassing both online and offline media. Sirish Chandran, editor of Overdrive magazine, remarks on GM’s high decibel campaign: “They didn’t stop advertising. You didn’t stop seeing Chevy hoardings all over the place. Everybody piped down after talking about the bankruptcy for the first month. The Indian customer does not have a long memory. Once he forgot, he went back to buying the Spark because it made a lot of sense since compared with other cars it was cheaper and offered good value for money.”
Reassuring dealers required an entirely different strategy, though. According to Arora, “There was some amount of anxiety that would be there with any businessman if he invested in your business or for your brand. But one thing we truly believe in and have been practising with our dealer partners is honesty and transparency.”
The company kept the dealers in the loop through the course of the bankruptcy proceedings, helping them understand what the impact on India could possibly be. Besides, GM stationed personnel at its dealerships as a part of its “There For You, There For India” initiative and personally reassured both existing and potential Chevrolet owners. “I think we had the complete confidence of the dealers who were all out to support us in all our initiatives because if we did not have that, to be honest, we could not have really gained back consumer confidence,” says Arora.
It also helped that proof of GM India’s financial commitment to the market was there to see month after month, where it mattered the most—on the roads. Spark Music edition and an LPG version of Chevrolet’s small car were both launched this year.
According to K.V. Sridhar, national creative director, Leo Burnett USA, Inc. one of Chevrolet’s agencies in the Indian market, “People wouldn’t have believed GM was serious about a commitment to this country if the vehicles were not out on the streets.”
GM’s target for the Indian market has been a modest 10% share, but the aggression with which it is gunning for this number is greater than ever before. Be it launches, associations or one-of-a-kind schemes, GM has shown itself ready to do it all.
The recent success has borne out its efforts but many believe it is at least in part a function of a very buoyant auto industry. The true challenge as Chevrolet steps on the gas will be to maintain its sales trajectory even after the current auto boom subsides.
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