Visit the global automotive industry news blog with Asia automotive industry news and India automotive industry news.

GlobalAutoTV

"Logistical Challenges in India”
Conway A. Jeffress

asia resources

Need an office in Asia? Office suites, meeting rooms, virtual offices, network access

free downloads

ASIA: "The ingredients for a strong Governance, Risk and Compliance function in Asia Pacific" report

ASIA: "The ingredients for a strong Governance, Risk and Compliance function in Asia Pacific" report. 32-page report by KPMG.

proceed to download

eJournals

backASIAtalk May, 2012

How to tap a market like India

India's premier B2B automotive magazine "Autocar Professional" asks our Managing Partner India, Wilfried Aulbur, what would be the key strategy to tap the opportunity in the Indian automotive market, especially for a newcomer.

Do you think it’s already too late or too difficult in India for the couple for OEMs who are yet to enter this market? What kind of strategies should they use?

No. I think there are examples of how you can do that successfully. We have players who have a significant share in the market and also players who have significant visibility. What it means that you have to be willing to invest in the market at this particular point in time. That means that you put the right product on the road that meets Indian requirements.

You also have to back it up with good processes and good structures regarding the kind of organisation you set up in the country and a significant marketing investment. So yes it is possible, but it is not cheap and requires real commitment to the market.

So does it mean that perhaps if a global OEM wants to enter the market in 2012, instead of having done so in 2002, should it brace up to incur losses for a longer period now?

Your business case needs to factor in definitely the customer behaviour that you see in India in terms of value for money which will potentially have an impact on your localisation strategy and also on the contribution margin that you can expect per vehicle. You will have to factor in significant marketing investments and also significant investments in building a network in the country to make sure that you have a distribution reach, service reach and a sales reach that is adequate to sustain a fair volume.

How does a company do that, if it’s losing volumes in its home country but still has a vision of going global and wants to tap a market like India?

If you want to take the opportunity, then you basically have only one choice. That is, you have to pay for it. I don’t think at this point there is an entry in India which doesn’t require a certain amount of investment, and a long-term vision of this market. As you said, nearly everyone is here and the ones who have come late and are successful are people who have put a significant amount of money on the table. They invested in marketing, in bringing products that are attractive to consumers. There is no other way around to drive volumes.

In your new role, how can you capitalise your bullishness in India and identify some areas that Roland Berger Strategy Consultants can benefit from?

If you look at the consulting market in India, it is growing at a very rapid pace. Also, if you look at the overall size of the market, you will see that it is very attractive.

So from that perspective, India is definitely a must-have and also, as I said, there are a lot of opportunities in India. Like one, it is still possible to bring some of the companies into India and also help Indian companies with their global footprint and acquisitions, which is not always an easy game. We have examples of some that have worked and some that haven’t. Plus we have an opportunity to help Indian companies become potentially more competitive in terms of how they do business.

We still find a rather large variation in terms of process capability and quality, depending on the players. You have the state-of-the-art globally competitive companies and you have some companies that have an opportunity to become even better. Plus, you can help international players in the Indian market to exploit the market and fulfill their potential.

Are you helping any Indian OEM or suppliers in such an exercise? And also is it happening the other way around — like an international OEM or supplier looking at an Indian acquisition?

Market entry is still happening from international players in India. This is not something that has come to a halt.

Lastly, for Roland Berger Strategic Consultants, do you see any kind of alliances in India?

We have taken a partnership decision to go for an equity-based expansion globally and the partners have equity in the company. So we have the money to expand. We are quite confident that it is the right way for Roland Berger forward.

Source: Roland Berger - GAI

previous page

go top

search our site