For Chapter IV of our online discussions we decided to do things differently. Having spoken extensively to most of the leading automotive manufacturers in the country about the effects of COVID-19 on business and their plans for the way forward already, we thought getting the Indian heads of two of the world’s most popular manufacturers – Fiat Chrysler Association India and Volkswagen Passenger Cars India – would make for an interesting conversation and boy, was it interesting!
Panelists: Dr Partha Datta, President and MD, FCA India and Steffen Knapp, Director, Volkswagen Passenger Cars India
Moderator: Ramesh Somani, Chief Editor and Publisher, BBC TopGear India and Exhibit
[Ramesh Somani]: Steffen, how has been your experience with the Indian car market? How different is it from the European markets?
[Steffen Knapp]: I’d like to start with the similarities, both markets love our cars. They all enjoy to drive and appreciate the convenience of owning a vehicle. In terms of differences, India is much more value-driven. The customers here are a lot cleverer in terms of negotiations and getting the best deals from their rupee. While buying cars Indian customers also tend to look for a lot of features which are particularly shiny, the visible change. The products need to be refreshed at a higher frequency as compared to markets around the world. The customers in India tend to stick with the dealership in terms of after-sales and service, which is higher than our European markets.
[Ramesh Somani]: Partha, you have spent a considerable amount of time in the US and China and we know these are very big markets. How would you compare the Indian customer to them?
[Dr Partha Datta]: If compare them I think the segments and requirements are just a phase behind. China likes bigger cars and India is slowly getting there. Having said that both markets are hugely driven by the value proposition and like to have a lot of gadgets and glitz in their vehicles.
[Ramesh Somani]: As you just pointed out, customers like gadgets and technology. How important of a role do you think technology will play in terms of vehicle launches and car buying experience?
[Dr Partha Datta]: The current situation has made people more aware of the importance of sanitization. I think additional features like car sanitization and the kind of filters that we use in the car will drive customer decisions on car buying. Customers have also realized the importance of contactless sales and service experience. Which means now they want to purchase vehicles and also get them serviced with the least interactions. These requirements will further grow and we are constantly incorporating more technology into our products and sales channels.
[Ramesh Somani]: How has the lockdown period been for you? Also, any books you read or any shows you’ve watched?
[Steffen Knapp]: I really appreciate how technology has been working and supporting the business during the lockdown. In the coming times, we will be able to travel less and be much more efficient. To a certain extent, this has also presented companies with an opportunity to cut costs. It’s an experience which is working phenomenally well. With a lot of time freed from traveling I am enjoying my time being at home with my family. It’s interesting to see my kids take up virtual classes. I’ve not been reading lately, but I would really like to recommend The 5 AM Club by Robin Sharma.
[Dr Partha Datta]: There is a new rhythm that I have adjusted to. I work out, cycle to the market to get my groceries. I also play individual cricket where I bounce the ball off the wall and go fetch it myself.
[Ramesh Somani]: I’m going to launch an online poll. We have 483 viewers who are going to cast a vote to the question, “Should Jeep and Volkswagen bring electric SUVs to India?”
[Ramesh Somani]: So we have the results here, 53 percent of the audience wants to see electric cars from your brands, six percent would like EVs to stay away and 41 percent have voted saying not before the infrastructure is in place, which makes sense.
[Ramesh Somani]: How do you think buying trends would change post the lockdown?
[Steffen Knapp]: There will be a huge shift to online platforms. Earlier people would do their research before buying vehicles and showrooms would help them reinforce their decisions made from home. Now, people would be staying home while we take our products to them. Test drives would be done in their local environment. Walk-ins were dropping in tremendously last year and the trend would go down further. Only the way people buy would change dramatically and we need to get structured to offer customers better packages and incentives online.
[Ramesh Somani]: How do you plan in enhancing the online buying experience?
[Steffen Knapp]: It’s crucial for the online experience to be seamless and user friendly. If I have to operate multiple windows to gather information and get my desired setup displayed, I don’t think it is convenient for the customer. We have to find ways to make it simple for the customers, incorporating the host of virtual technology and experiences available at our disposal. People like to play on the internet, it’s a fun element too for a lot of our customers and we need to look at ways to enhance this experience.
[Dr Partha Datta]: The most important step is offering customers peace of mind, delivering that peace of mind throughout this experience with along with convenience and ease is the way to make online buying more rewarding. For many customers a vehicle is the second most expensive thing that they buy and they do a lot of research and information gathering over the internet. We just have to integrate a better platform for them to explore our products even further.
[Ramesh Somani]: How do you see the global SUV wave post-COVID-19?
[Dr Partha Datta]: I don’t believe the SUV body style will ever become less popular. That is the most popular segment around the world-definitely in India and definitely in China. It’s a very popular body style primarily for its utility and simplicity. The market-style will continue to be popular and the popularity of SUVs will continue.
[Ramesh Somani]: Time for our second poll – we are asking the audience if they would prefer going to showrooms for test drives or prefer to have test cars come to their homes.
[Ramesh Somani]: So the trend has definitely shifted, we have 62 percent of people wanting to try test driving a car from the convenience of their homes, 24 percent would prefer going to the showrooms and 14 percent of the audience isn’t sure yet.
[Ramesh Somani]: We are hearing that the five-seater Tiguan would be coming back. Is it a fact or a rumour?
[Steffen Knapp]: The Tiguan is our best-selling model currently, we sold around six million cars worldwide. So it’s an important part of our line-up and also a very interesting product that will guide Indian markets. Next year we would be launching the Taigun which is a compact SUV that would be 93 percent localised, making it more accessible for customers.
[Ramesh Somani]: How much of a challenge is it to develop a global product?
[Dr Partha Datta]: It is a huge challenge, it is a very big task. It’s a fun task, but the diversity of the markets makes it very challenging. The most important thing to do is keep the development costs as low as you can, and that is how you ensure it pays you back.
[Ramesh Somani]: Given money is not a problem, which car would you buy?
[Steffen Knapp]: For me a really the spectacular experience was when driving the Volkswagen Golf R, the compact form and the driving ability of this vehicle is just spectacular. What I also like is the understated looks of the vehicle, it some something I would definitely go for.
[Dr Partha Datta]: Usually, when you drive a vehicle and you look, you see the picturesque scenery of a by-way. You look at it and admire it, but there are only a few vehicles that allow you the luxury to go there. And that is why I would pick the two-door Jeep Wrangler.
[Ramesh Somani]: When do you think sales will start picking up?
[Steffen Knapp]: We have started to see good traction already on our recently launched 1.0-litre TSI engine in the Polo and Vento, clearly it is not at the pre-crisis levels but it is slowly picking up every day and we have around 35 showrooms open and 60 workshops are open. I think it will pick up in the Diwali festive seasons.
[Ramesh Somani]: We are all biologically wired to get out there and drive cars and I am sure the lockdown has made people more aware of the benefits associated with personal mobility and people will return to buying vehicles. On this positive note we end today’s discussion, thank you, gentlemen, for your time, appreciate it!