How to Succeed in the Ultra-Low-Cost Car Market?

People buy vehicle as a solution to their needs. Many companies undertake QFD deployment wherein the customer needs in quality terms is quantified & accordingly the product designed & marketed. As observed in past 3-4 yrs the demand has slowly moved from cheaper & basic models to higher end & luxury trims. Also the smaller segment has seen a tremendous growth due to factors like incresed fuel cost,poor infrastructure,better lifestyle ( everyone in the family needs a car for himself),ease of parking, deteriorating public transport system & so on. The personel segment will look out for small but smarter cars--- luxury, safety,design & so on. On the other hand the the stage segment will look out for cheap & low operating cost of the vehicle that can possibly seat between 4- 6 pax.

I will go for clean sheet approach which includes

1) Cooperate with suppliers.

2) Reduce the numbers and complexity of parts.

3) Invent rather than adapt.

4) Standardize at every stage of the value chain.

Dear Kailash & Deepthi Behl,

http://www.atkearney.at/content/misc/wrapper.php/name/file_a-nano-car-in-every-driveway_1229426678a18b.pdf

Is this where you got this topic, if so lets come out of this paper and riddle with new ideas :

First of all though however eminent these speakers and writers are , i think new thing will be adding the flexibility of change of design according to customer necessities in different locations in India.

Like a person bbuying a NANO in hill side to a person buying a NANO to the remote village side ( doctor travelling for reaching his patients), also talking to the commuting oriented business people through local dealers on basis of rent , lease or simply take over on financial suppprt

None the less , if you have not read it from the link , then hats off to you guys!

It was only that i read this recently and today we are discussing it.. any way happy about ongoings.

regards

krishna

What I feel the planning is Indians are capable of developing a good vehicle at costs lower than China. In China, they start from the daily cost of living and cost of education of Children. If we can bring down these cost to a low (may be 80%) it will get multiplied in all the related areas and will bring around 50% for the final product

It is true that "Ultra Low cost car market" is a huge potential, in fact one can say, Blue Ocean, clean sheet approach will differentiate the companies. Focus on core Research, efficient supply chain, timely introduction of products in market.Standardization & Optimization hold the key.

It is not the low cost that wins the market/ competition. People are purchasing a perfect car that suits their needs, safety, practicality.

The companies should look at this way. Ex. Hundai is not in the race for cheepest car.

According to me the dynamic and powerful ultra-low-cost car market is forcing manufacturers and suppliers to decide between two strategies. The first is to preserve their brand and market positions and protect them against new market entrants, current competition and future price pressures. Established suppliers opting for this stance risk falling into the “low-cost trap” between manufacturers and their new component standards and lower target prices.

The other choice for manufacturers and suppliers is to participate to capture share in the fastest growing segment of the industry and prosper by being leaders in developing the market. We believe first movers will have the opportunity to capture market share and build consumer loyalty.

I think that success in the ultra-low-cost car market can be achieved and will be measured by cooperation, creativity and innovation. There is a certain and unknown amount of risk, but this market is destined to change the industry landscape, much like the Model T changed auto manufacturing and the world’s sense of mobility. While ultra-low-cost cars may not be available on every continent, the innovative ideas and techniques generated for this market will have a long-lasting impact on the entire automotive industry.