Renewal of the Ford Mustang and Chevrolet Camaro
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Renewal of the Ford Mustang and Chevrolet Camaro
- Since the 60s, American compact sports cars are incorporated in a specific category marketed under the name "Pony cars".
At that time, there were six competing models all produced by the "Big Three": Ford Mustang and Mercury Cougar for the Ford Group, Chevrolet Camaro and Pontiac Firebird for the GM group, Plymouth Barracuda and Dodge Charger/Challenger for the Chrysler Group.
At that time, there were six competing models all produced by the "Big Three": Ford Mustang and Mercury Cougar for the Ford Group, Chevrolet Camaro and Pontiac Firebird for the GM group, Plymouth Barracuda and Dodge Charger/Challenger for the Chrysler Group.
- In the early 2000s, only the Ford Mustang survived, in a modernized form, but still adopting the same positioning: an affordable sports car for the masses. In 2004 the Mustang V was launched and it incorporated some traits of the Mustang I (a style called neo-retro) and achieved a production peak with 200 000 units produced in 2005.
- This success encouraged GM to launch in 2009 a Chevrolet Camaro V neo-retro style and Chrysler launched a Dodge Challenger of a similar design. As a consequence, the “Pony car” market experienced a new increase, reaching 250 000 sales in 2012, which had not happened since the early 2000s. 2013 nevertheless marked a sharp decline for this market.
- Ford launched the Mustang VI in 2014 and Chevrolet launched the Camaro VI in 2015 to revive the market. Dodge has not announced the replacement of its Challenger that has not yet experienced a sales decline in 2013, unlike competing models from Ford and GM.
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Why didn't the Tata Nano meet its expected success in India?
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Why didn't the Tata Nano meet its expected success in India?
- After the failure of its Nano launched in 2009 (less than 300 000 sales in six years, while the target was three to five times greater) the Tata Motors group has thoroughly reviewed its model by presenting the Tata GenX Nano that remains the cheapest vehicle in the world market. The opportunity for us to review the reasons for the failure of this model that was supposed to be a mass market vehicle.
- The intention with the Tata Nano was to offer Indian families using two/three wheel vehicles, a car for them to travel in safer conditions on the dangerous roads of India and be protected from the weather. The idea seemed good.
- Strong marketing campaigns accompanied the launch of the vehicle, creating a favourable "buzz" and arousing interest and curiosity. But Tata Motors could not maintain the "hype" created to launch the Nano. TheIndian carmaker, which aimed for 250 000 annual sales initially and 500 000 in the future, saw its model reach with great difficulty a peak in sales of less than 80 000 units in 2012. In 2013, fewer than 20 000 Tata Nano found buyers (see graph below).
- Several elements can explain this failure:
1. No match between vehicle positioning and needs: This non adequacy can be analysed in different ways: The vehicle was not adapted to the needs of the target market. For example, the boot could not be opened from the outside. While users of 2 and 3 wheel vehicles are used to carrying many different objects. These defects have since been corrected but left a negative impact.
2. The vehicle price rose sharply compared to the original positioning. At its launch, the Tata Nano was supposed to be sold at a starting price of 100 000 rupees (or 1 300 Euros), while 2-3 years later its price ranged between 145 000 rupees (2 000 euros) and 265 000 rupees (3 600 Euros). Admittedly the vehicle was improved (additional equipment, increased security) but it is far from the initial promise.
3. Instead of marketing the vehicle as a competitor to two/three wheel vehicles, Tata and the Indian market considered this vehicle like a car which was "ultra low cost". The "ultra low cost" necessarily refers to the owners' economic status.
In simplified terms: Tata Nano = poor family. While no customers wants to be referred to based on his social condition.
In simplified terms: Tata Nano = poor family. While no customers wants to be referred to based on his social condition.
4. The limited capacity of the plant at its launch, especially during protests following the construction of the initial plant (Singur, West Bengal), which was eventually transferred to Sanand (Gujarat).
5. The need to be on waiting list to buy the Nano and delays in delivery (because of production capacity).
6. A negative media wave following different cases of spontaneous fires that caused questioning of vehicle safety.
- However, Tata still believes in a market to replace the two/three wheel vehicles. And following the statements of the President of Tata, it is not impossible to see a totally new version of the Tata Nano, which would be marketed both on the Indian market but also on the Indonesian and European markets (within a different positioning).
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Which is the biggest European plant for each carmaker?
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Which is the biggest European plant for each carmaker?
- Inovev has identified the largest plants in Europe of each of the 14 largest international groups in 2014, comparing them to the volumes recorded in 2005. Production volume of these 14 plants reached 4.5 million vehicles in 2014, against 4.3 million in 2005. Production is therefore more concentrated (due to the closure of several plants).
- 9 of these 14 plants were already the largest plants of each group in 2005: Wolfsburg (VW-Germany), Vigo (Spain-PSA) Sindelfingen (Daimler-Germany), Zaragoza (GM-Spain), Tichy (FCA -Poland), Gent (Geely-Belgium), Solihull (Toyota-United Kingdom), Swindon (Honda-UK) and Esztergom (Suzuki-Hungary). These factories are the largest plants of the car carmakers in Europe, often producing flagship models (VW Golf, Opel Corsa, Fiat 500, etc).
- 5 plants emerged in 2014: Sunderland (Renault-Nissan - United Kingdom) that replaced Douai (France) in the top 14, Munich (BMW-Germany) replaced Regensburg (Germany), Onnaing (Toyota- France) replaced Burnaston (United -Kingdom), Cologne (Ford-Germany) replaced Saarlouis (Germany) and Nosovice (Hyundai-Kia - Czech Republic) replaced Born (Mitsubishi - Netherlands). Those plants benefited from the growth of SUVs (Sunderland) which reduced the influence of MPV (Douai), the growth of B segment models (Cologne, Onnaing) reduced the influence of the C and D segment models (Saarlouis , Burnaston), the transfer of models from one plant to another (Munich overtook Regensburg) and finally the arrival of a new carmaker in Europe (Hyundai-Kia) while another vanished from the European landscape (Mitsubishi).
- It is also interesting to note that only three German companies (Volkswagen, BMW, Daimler) have their main plant in their country of origin, unlike the other twelve carmakers represented here.
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Renault launches the Kwid in the Indian market
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Renault launches the Kwid in the Indian market
- Renault unveiled the Kwid in India, designed for the local market. With the Kwid, Renault tackles Indias' segment A vehicle market. The segment is the largest in India with 42% of the total market in 2014. This segment is dominated by Marutti-Suzuki with the Alto and Dzire models and Hyundai with the Eon, i10 and i10 Grand.
- In terms of price positioning (if prices are confirmed), the Kwid will not be cheaper than the leaders of segment A but will be sold at a local price of between 3 and 4 lakhs (4100 and 5500 Euros). Compared to other vehicles in segment A, the Kwid will be in the lower range. It will however be more expensive than the Tata Nano (2 lakhs or 2800 Euros) and Marutti 800 (2.46 lakhs ie 3 400 Euros). It is therefore difficult to describe the Kwid as an ultra low cost vehicle, since in the Indian market, its price is in line with its competition.
- This model will be marketed in India from the second half of 2015. It is 3,68m long (against 3,40m for a Suzuki Alto and 3,50m for the Hyundai Eon, but 3,78m for a Datsun Go and 4,06m for a Sandero), the Renault range entry model in India will have a 3-cylinder engine of 800 cc.
- The Renault-Nissan group has not confirmed whether this model would be later sold in Europe. If it were, it would be under the Dacia brand, which has indeed no model in segment A (the Sandero is positioned in B segment). A-Segment in Europe is proportionately lower than in India (around 10% of the European market), but is very competitive with forty odd models sold in 2014. In addition, the arrival of this new vehicle could compete with the new Renault Twingo which has just launched in Europe.
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FCA opened its new plant dedicated to Jeep in Goiania, Brazil
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FCA opened its new plant dedicated to Jeep in Goiania, Brazil
- The Fiat-Chrysler group (FCA) has launched its new plant in Brazil, located in Goiania and dedicated to various Jeep models. This is the first plant opened by FCA since the merger of Fiat and Chrysler was formalised in October 2014. At the beginning, the plant will have a capacity of 250 000 units per year.
- This plant will supply all Latin American markets, which we know, have an increasing demand in SUV and pickups, essentially compact or midsize vehicles. Thus the first model produced in this new plant is the Jeep Renegade (SUV- from B segment), whose production originally started in Italy last year.
- This Jeep will be joined by other models in coming years. It is likely that the replacement for the Jeep Compass (segment C) and the Jeep Cherokee (segment D) will be selected to be produced in this plant. For now, no announcement has been made about this topic. The Jeep Wrangler and a pickup that would be based on the Wrangler could also be produced on these assembly lines.
- In 2014, for the first time the Jeep brand exceeded one million units produced worldwide (1.1 million units against 0.8 million in 2013). With the expansion of its range of SUVs through the Renegade and its place of production being in an area with high potential for medium to long term sales, FCA's aim to produce 1.5 million Jeep annually is feasible.
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