In order for Ford and GM to benefit from the automotive market increase in India, these companies will have to repair their damaged global brand reputation. This will be a mammoth undertaking that will require technology, marketing and sales to work together tirelessly to instill consumer confidence for these two brands in this part of the world.
How much work lies ahead for Ford and GM in India? OnResearch Inc., a global research consultancy, commissioned a study in September 2009 to find out. The study involved over 750 consumers in India who were either the sole decision-maker or shared decision making responsibilities in regards to automotive purchases within the household.
Those that are likely to purchase an automobile in the next 12 months were asked what brand would they most likely purchase. Maruti (a Suzuki company) has a strong reputation in India and will continue to profit, but it is likely their market share will decrease from a high of 47% to as low as 20% in the next 5 years. Other market leaders such as Tata Motors could also be in for a decline in overall market share from its current 13% to a low of 8%.
Who are the companies that look to benefit most? The Japanese are poised to make a big impact in this market over the next few years. Honda has a current market share of 4%, and this could increase to 21% in five years. Other big winners could include Toyota who could own as much as 10% market share in 5 years.
How will the US automotive giants fare in this expanding new market? Ford has about 2% of market share and GM has about 3%. Because of their weak brand equity, it is unlikely these 2 companies will be able to increase their market share significantly. The total estimated market share these companies will have could be as high as 5% for Ford and 4% for GM. Unless both companies are able to dramatically repair their brand image, they will muddle along in mediocrity and miss this golden opportunity to fuel their recovery.
Is there opportunity here for these US companies? Yes, but they have to improve their brand image. How difficult a job is this? In the study, 14% said that their opinion of Ford has declined in the past year, and 16% stated that their opinion of GM has declined over the same period. The effort to change consumer opinion will have to be an epic one in order to ensure that these companies hit the target and not miss this opportunity.
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If you would like more information about this topic, or to schedule an interview with Jason Ten-Pow, President of Research Operations, OnResearch Inc. please call Dawn Forsyth (905)731-5567 ext 225 or visit www.onresearch.com
JASON TEN-POW,
President of Research Operations, OnResearch Inc.
Contact: (905) 731.5567 x223
www.onresearch.com