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Ashish K Mishra
Counter intuitive motor head with a fancy for old cars, green tech and clean fingers

Chevrolet India – The average car company

General MotorsThere is something amiss about General Motors India, well known in the country by its brand ‘Chevrolet’.

Earlier today, Lijee Philip, a journalist with The Economic Times wrote an interesting piece detailing GM’s losses in India. The story states that General Motors India recorded a loss of Rs. 746 crore in 2012. And that ever since GM began its India operations, its losses have piled up to Rs. 1598 crore, making it the least profitable car company in India.

For a company that’s been here since 1994, that’s pretty dismal. Why? A. It is a long time to get your act together. B. On the face of it, GM doesn’t seem to have any big teething problem. Let me explain. Now it is pretty well known that Fiat doesn’t do well in India because the company has issues when it comes to after sales and network. Maruti Suzuki is the market leader but it has a limitation in terms of number of diesel engines it can buy from Fiat or ones that it can make in its own plant. Honda India does not even have a diesel engine so it is obvious that Honda’s sales volumes will take a hit. Volkswagen is fairly new in the country and doesn’t have a small car in its portfolio to compete with the likes of Maruti and Hyundai. Renault and Nissan still have a pretty small sales and after sales network.

Chevrolet does not seem to have any of these issues. It has the technology, portfolio of products which includes a small car, quite a few sedans, a utility vehicle and a network which covers almost 170 cities in the country. But it continues to remain a fringe player.

Chevrolet's sales in the last decade

Chevrolet India’s sales performance in the last decade

Come to think of it, this is a subsidiary of General Motors, one of the largest car companies in the world. The story becomes a little bit more curious when you compare the Indian unit’s performance against GM’s operations in other parts of the world. GM is doing pretty well in Brazil, in China, in South Korea, in Russia, in America…except India.The top 10 markets for Chevrolet in 2011 looked like this: America, Brazil, China, Russia, Mexico, Canada, Argentina, Uzbekistan, India and Colombia. Things changed quite a bit in 2012. India sales crashed from 1, 11, 056 in 2011 to 94, 757 units in 2012. That’s a drop of 15 percent.

What’s going wrong?
Last week I spent some time chatting with a dealer of Chevrolet in Mumbai. Here’s the essence of what he said. Chevrolet in India is an average performing car company. Everything about it is average – their cars, design, engines, sales and after sales. They aren’t exceptionally great in any of these areas. “In the mind of the customer, Maruti Suzuki stands for the best in class fuel efficiency and network. The mantle of German engineering is held by Volkswagen. People believe what they are buying is a premium vehicle with great engineering. The stamp of reliability is with Toyota. What do we stand for?” he said. Tough one. I understand that in the US, GM stands for sports utility vehicles, trucks, crossovers and muscle cars. Obviously it has none of that positioning in India.

Then, how is life as a Chevrolet customer? The JD Power 2012 India Customer Satisfaction Service Index study ranks Chevrolet as third from the bottom amongst 12 manufacturers. For a company that’s been in India for 19 years, GM should have done better.

JD Power India Customer Satisfaction Index

2012 JD Power Customer Service Index

This problem reflects in the decisions customers make. The dealer had an interesting case study. “A customer walked in to look at the Chevrolet Sail (hatchback) but he said it is too long for his parking place. So he moved on to look at the Chevy Beat. The moment he did that I knew that he has several other cars from competition to choose from. He said he will come back later. But he never did,” adds the dealer. Analysts believe that there is another serious issue of cannibalisation. “GM’s major hurdle is to get increased footfalls in the showrooms and improve upon conversions. The last few GM products have all ended up cannibalising pre-existing products. The Beat finished the Spark and the Sail will damage the Beat’s sails,” said Deepesh Rathore, managing director of IHS Automotive India, a forecasting firm.

Quite a few people believe that GM’s cars look outdated. I am not so sure about that. Well, sure GM is no Hyundai in the design department but then there are quite a few ugly looking vehicles in the market which are happily lapped up by customers.

Any Chevrolet car owners out there, I’d love to hear your feedback.

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Hey mishra such as a you share wonderful experience with us. thanks to you. i am a chevrolet car dealer i understand your all experience.
parvati parinayam
I agree with one aspect of discussion...............lot many products in similar range can result in cannibalism on each other. Chevrolet Spark is an excellent city drive vehicle with good AC, 4 cylinder engine, air suspension and minimal parking space....GM tends to market Beat in its place resulting in reduction in Spark sales....
i have shortlisted sail sedan petrol ,( base )but few people have told that this is a made in china car, with no resale value and defect in dashboard (making sound). some are saying its parts/service is very high. Now I am confused???///
Rahul Karkhanis
For a company that took a car off its shelf which defined all the terms "reliability, efficient, quality, great design, premium, value for money", where do you think that company will land up. Yes, ia m talking about the beloved Chevrolet Optra. They thought the Optra would cannibalize the great Cruze, such was the image of the Optra. Right now, there is no Optra and Cruze sales will eventually dip with rising slope. Chevrolet has a hopeless second hand value. Only a Chevrolet person will buy a chevrolet again or hope to and the reason for that is: Chevrolet solely stands for ride quality. Superior suspensions, sturdy vehicles makes one feel steadily planted in the car (unlike the feather light steerings, bouncy suspensions of hyundai's and hondas). The ergonomics are brilliant (unlike the skoda rapid, volkswagon, fiat where the handbrake is under the center arm rest). Even the ford ecoport has cupholders on the drivers side and the handbrake on the passenger's side. Pu a couple of bottles in those cupholders and see how they interfere in pulling of the handbrake. The only other car I found somewhat better ride quality was surprisingly the Fiat Linea TJet top end. But that company is even worse with cheap interiors and now bad network of sales and service dealers. Instead of encouraging the likes of Optra, they binned it. The features that todays chic Hyundai's, Skodas and VWs and other advertise were already present in 2003/04/05 models of Optra. Undersea tray, integrated FM antenna, center arm rest, headlamp levelling, cooled glovebox. Talk about sunroof, even therecently announced Skoda Octavia has its sunroof popping out on top of the roof instead of the much sophisticated integrating the slide within the roof and this for a 12L + price range. This is the reason no new vehicle launches really excite me as it still does not compare to the Optra in terms of pricing and what it has to offer. Look at the 004/05 model of Optra and see the deign lines flow on the side, front and back. It was already there!! hyundai came up with the fluidic design with wrap around lamps making it modern. Put some up to date new gizmos and gadgets - rain sensing wipers, touch screen with integrated rear park assist, day running lamps, driver info system, raise the seating height(it feels like sitting on the floor as compared to other vehicles, also problematic for the ones with larger tummies, pregnant women), modernize the dashboard and the gearbox area, optmized engine for better (on-road)fuel performance and this car is good to go in that 7-10L bracket. And now they have come up with SAIC chinese cars in form of Sail. Thats not a step up, its a step lower. It looks like a famished ignored company with no real though process going on. Somehow, they manage to hit the loss making formula everytime they come up with a business strategy, as if it were pre-decided to land in doom. India is said to be a small car segment. You need to realize that people here are willing to shell out for what they feel worth in a product. Then it could a B, C or a D class vehicle. Optra at the same price bracket can change Chevrolet fortunes.
ha ha dude, GM is not going to make money. Seems like its Indian biz heads have decided that they will not let GM take a single dollar to US. Look at their pathetic service, and no once cares!!!
Cars are good but after that 3 yrs warranty period service is poor. labour charges are high and dealers are not interested in servicing old customers. Hence anybody getting feedback after the 3 year period will never advise to buy GM veichles.
India, and to a great extent, most of South Asia, is a B-segment market. Any company that doesn't read this simple reality goes for a toss. Ford and GM, despite being in India for close to two decades never got the message. Ford didn't even have a product in the largest segment before they got Figo. Now EcoSport should easily double Ford India's single-digit market share. The Chevy Spark clearly was a rehashed Daewoo Matiz, and that isn't really a great thing. Beat is the only real contender. Unlike what auto journalists make it out to be, consumers don't buy cars that drive or handle well. By that logic, people should be lapping up Ford cars and not Hyundai's. They buy what makes sense. A good car in the B-segment backed by a good service network makes a lot of sense, at least in beloved India.
i purchased chevrolet sail sedan worth rs 6 lacs 2 months ago.you expect a new car to work fine atleast for good 6 months -1 year.you dont pay for the car but for comfort and trust in brand and you know it will not let you down come what may.for a middle class man it takes years nd years of saving to gather such a big amount of 6 lacs with lot of dreams attached to them.what if they are vanished or shattered within initial two months. It was 10 Pm friday night ,some might be coming from work ,some might be going to work,and some may be in the mood of clubbing partying but i was standing besides my so called brand new car and waiting for it to cool down with the bonet open so that i can drive back home .tried calling the chevrolet helpline few times but no response. no chevrolet service center was near by.just waited and waited..it was so embarassing and frustating .its only been 2 months and the car is getting overheated without any prior warning or notification.all of a sudden wheel steering became heavy ,gearbox clutch plate and brake sstarted to show resistance.atfirst i thought tyre has gone flat.but the tkhyre pressure was fine.i checked the screen to see if there is any warning or not...nothing found..i opened up the hood and annoyingly lot of heat was coming out which i had never sensed before. i do check the coolant level,engine oil nd other fluids in the car regularly.i got the first recommended check up done at 1000 kms..it only driven 3000 kms.already showing symptoms of great engineering... few people asked me which is better among sail,amaze and desire .undoubtedly i said go for sail.they will abuse me entire life for having taken this decision... i request you to either change this car or give me the refund..seriously i dont want this car anymore or may be no other general motor car..i am done..even if you repair it for me i will not be interested in keeping this and will be strong detractor. never expected this to happen in the first two months after investing 6 lacs.what an experience..i am gonna write to head or president of general motors whatever too and let him know of the facts.lets see how customer centric you are. "when life gives you more" now i understood . thanks varun arora 9716718018
Well just one thing.... have u look at the interior of the new Sail... ??? On the test drive i checked the interior... and i ws shocked to see such a boring & depressing interiors. Common GM ppl, its a new model. The interior look like a 2003 model car. How could u appeal to ppl with such things. Max buyers today are youngsters. Just take a example from Samsung... even if u make a copy of other product, u have to make it appealing.
Neeraj Piplani
First of all i shall congratulate Mr Ashsih for such a well written topic. I personally believe it is more of the branding issue which has made GM suffer a lot inspite of the fact that GM has some of the best quality products in india. After going through all the coments on this topic there is no denial that GM's recent launches like Sail hatchback and sedan are very capable models, needless to say Sail is the most acclaimed vehicle in China . I personlly took the test drive of Chevrolet sail hatchback and toyota etios liva and believe me Sail hatchback is an extremely refined car when compared with the noisy and lacklusture etios liva. Many of the Indian buyers have a mis conception that if a product is manufactured in china it will be of inferior quality . For all such people their is an advise note. Just have a look at your mobile phone and your laptop and most of them will find their devices to be manufactured in china. I am really shocked that if a company like Toyota has managed to sell inferior products like Etios and etios liva , i dont feel that there is some reason other than the poor branding for GM's meagre performance in Indian market.
I think GM have more of a global strategy than a country specific strategy. China is doing well because of its local manifacturing partners. Like i10 which came with fresh designs, engines (kappa2)and all the technical as well as design updates, cant see the same breath of fresh air coming from GM time to time when it is needed. We see the same Smartech 2 1.2 L petrol where as i10 has kappa 2 with vvt and so does the k10 engine. Why would a buyer go for an obsolete smartech 2 1.2 L petrol when he has a better 1.2L k10? Spark is another story.. I like the cosmetics, but then again no major technological/ergonomic upgrade.. and spark was in dire need of it
i agree with the above comments, i am using spark for last five years, the car is working extremely good. i feel the problem with gm is they are not able to understand indian market properly and thats the reason are weak in marketing and also designing the right products suitable for indian market as may be hyundai is doing. as same with fiat maybe they are also inline with gm and suffering with same problem.
Bijal Sathwara
GM seems to be a market leader and as for future strategy believes in going aggressive in countries like India, China, Brazil and Russia so why is it not reviving the image of Chevrolet in India when they are planning for small segment car of Chevy sonic in US. Does this approach shows that company is not in lieu with their strategy or has lost hope from Indian market.
I have taken sail sedan (diesel) and drove around 2k km. the car performance is very good with good mileage in city. I am not sure about sale service but will experience in near future. I heard about sail sedan sales worldwide and was impressed. But anyways the car is very smooth to drive and the price is kept very competitive which matches to under 4meter cars. Look is bold and decent and could not depress you. Take a test drive and then come to the final conclusion.
I have booked SAIL Petrol Base model on 2.3.2013. by paying advance Rs.50,000/- with the assurance of delivery in the month of March but till today 4.4.2013 I have not heared since then from them about my ordered car well so much hype of 7000 booking but even the company didnot expected this responce and as such no matching manufacturing facility , God knows when I will get my car I am going to cancel the booking after waiting for one more day and book Honda Amaze.
I am in the middle of finalizing a car. The two contenders in my list n budget is swift dzire vdi and sail ls abs. I have thoroughly tested both the vehicles. I don't know what people don't like about sail. Its spacious at least far better than swift. Has better clear view while driving. Has better drive ability. More boot space.... n I really think its more value for money Swift needs service every 10k km where as sail needs every 15k. Then sail doesn't need to change gear oil. And the average per litre is almost same . Pickup is comparable. I think sail is a better option if u don't intend to sell ur vehicle every two years.
19 years...3 brands (Opel, GM, Chevy)...seriously lacklustre models, pathetic service set-up & attitude (most people who know the Pune dealer background will never buy a car from them)...how can you expect a confused and indifferent company to create a "connected" brand ??? #justasking
You are very right in highlighting customer satisfaction index of GM. They are very poor and arrogant in responses and have personally experienced that they have an AMERICAN attitude. They believe in taking customer for a RIDE :).
Chevy is hopeless, their sales and service is also hopeless, improper diagnosis, unavailability of spares even at authorized dealerships, low resale value, high maintenance cost have contributed to overall losses
Himanshu Jasodani
I have a Chevrolet Beat petrol and a Maruti Suzuki wagon R. Beat is a great car with good mileage, but when it comes to service I realise the difference between a Maruti and a Chevy. Maruti has the unmatched service network and for small things they dont even charge the money and do it freely where as in Chevrolet its not that. Also I would say that the company should have launched 'Sonic' instead of 'Sail'. And one last thing the company should brand it like General Motors and not Chevrolet all the time. When we hear about GM we get the thinking of the largest car maker in the world.
I drive a Beat and I guess the company lacks in providing after sales service. Its showrooms are not nice . I bought the car because of its design and lower cost than other varieties. But my next car for sure won't be a GM.
I drive around a Chevy Beat Diesel (Op) and being a motor enthusiast and techie, I'm happy at what it allows me to do. have done 7k so far and my average mileage inside Pune city (with 10 % AC) is around 19 kmpl. It is decently powered to make it peppy to drive inside the city. I do agree, it doesn't breeze upto a 130 kmph without pushing a bit on the highways, but then yea, that would mean your mileage would go out for a toss. What I like about the car apart from this is the styling of the instrument cluster. It's modern and not bland like several other cars in this segment. With respect to service, maybe it's too early for me to say anything, but my family has had Chevy Optra Magnum since few years now and it's still one smooth helluva car !
I own a Chevy Spark and its done 76k kilometers. I have no complaints with it. Its peppy, fuel-efficient and seats the family of four without an hassle. I will buy the Sail diesel sedan this diwali, it looks like an Optra which I always wanted to buy. Even the base model at 6.29 lakh has power windows, tiltable steering, a slick transmission made in Europe and a rigid suspension as ever - you dont feel anything while going over potholes. Can any other car company give me the same feeling? The Dzire, lets face it, is ugly and Honda Amaze is uglier, the Etios is a taxi.
u must be very few who would think of a chevy 2 nd car now. i still have the corsa but sold off optra....i think there is a lot to choose from...none of the chevy cars are best in class...VW and Renult/Nissan will go past Chevy soon
Chevy in India is caught with a wrong portfolio...Chinese cars will not sale in India. They should have brought Sonic...discontinued Optra and Aveo long time ago...but i guess Sail bcoz of Chinese ownership. All of them except Beat and Cruze do not have character. I think Chevy will never make it in India..unless they bring back Opel...look at Opel portfolio globally now and u will know. TO CHEVY OWNERS: CHEAP DOES NOT SELL IN INDIA...BRAND IMAGE AND UP TO DATE CARS SELL
I have just purchased Chevroet Sail. Fantastic car with absolute value for money. I think GM suffered because they had launched spark and beat bit late. I think in days to come they should pick up. Any dealer of Maruti is highly arrogant and even the warranty offered by them is least. After sales service is also lousy.All over our country, promises made are never fully implemented so I guess this works to advnatge of Maruti.
Ashish K Mishra
Hey Vipin, did I read right that Maruti dealers are arrogant, their after sales is lousy and they make promises they can't keep so all of it works to the advantage of Maruti?
I agree with Vipin, Maruti guys had scratched my new car arnd 6 yrs. ago. After lots of fight, writing mails, e-mails, phone calls they just patched but not repaired. Today my said car (Alto) is old and I'm planning to buy Chevy Sail or Toyota Etios Diesel since my monthly running is > 1200 km/month.
Not a Chevrolet owner but as an auto enthusiast, I believe the reason behind Chevy's sub-par performance is the product portfolio they've chosen for India. People think of Camaro's and oversized trucks when they think of GM. What they get here is completely the opposite of the American line-up. The closest we got to the company's international offerings was with the Cruze and Beat, both of which did significantly well in the market. The other products either lack the appeal, one expects out of an American brand (Spark, Aveo/Sail-UVA, Captiva) or died because of lack of updates (Aveo Sedan, Forester, Optra/Magnum). It's funny how manufacturers still think "cheap" sells in India. The Toyota Etios and Sail's failure clearly shows that the buyers have come off their age. People look for value and they clearly do not mind paying a little extra for it; Hyundai being the obvious example here. The i20 and Verna are much more expensive than their segment counterparts and yet manage to do decent figures. Chevrolet, instead of launching the Chinese-twins (Sail/U-VA) should've stuck with the Aveo's successor, the Sonic. Both the Sonic hatch/sedan blended in perfectly with the manufacturer's American image and would've done well to uplift its brand appeal in the country. From the looks of it however, it seems that the Sail and U-VA will both die a slow, painful death like its predecessors, the Aveo-sisters. It's sad that the Beat and Cruze are also due a facelift this year but won't be carrying the same set of upgrades that the international cars got. Even though the company was showing signs of recovery under Karl Slym, I am not sure if I can say the same about Mr. Lowell Paddock's lead. If an 18-year old with a cell-phone and an internet conncetion can understand what's wrong with a multinational auto corporation, I bet the company itself can do better if they focus on customer-feedback in future.
And GM does better with the 'Chevrolet' branding than the 'Opel' branding.
 
 
Ashish K Mishra
Former senior principal correspondent at Forbes (India). Since 2008, I have been writing on corporate strategy in the automobiles, clean technology and supply chain space. Before I got onto this assignment, I was part of the team that covered feature articles at The Economic Times. I actually started out as a trainee journalist on the ET desk in 2006. I graduated in commerce from Shri Ram College of Commerce in New Delhi and now live in Mumbai.

I love automobiles and spend hours reading up on them and then devote painfully long hours to work on old cars that attract my fancy. Right now I own four cars (my colleagues call them fancy, junk or whatever) and a bicycle which outside my work hours get most of my attention.
 
 
 
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July 03, 2014 16:47 pm by Mc Cumber
Hey mishra such as a you share wonderful experience with us. thanks to you. i am a chevrolet car dealer i understand your all experience.
July 02, 2014 03:23 am by parvati parinayam
I agree with one aspect of discussion...............lot many products in similar range can result in cannibalism on each other. Chevrolet Spark is an excellent city drive vehicle with good AC, 4 cylinder engine, air suspension and minimal parking space....GM tends to market Beat in its place resulti...
December 01, 2013 05:41 am by shuks
ha ha dude, GM is not going to make money. Seems like its Indian biz heads have decided that they will not let GM take a single dollar to US. Look at their pathetic service, and no once cares!!!
November 28, 2013 11:48 am by anup sharma
i have shortlisted sail sedan petrol ,( base )but few people have told that this is a made in china car, with no resale value and defect in dashboard (making sound). some are saying its parts/service is very high. Now I am confused???///
October 11, 2013 12:12 pm by Sambit
I agree with Vipin, Maruti guys had scratched my new car arnd 6 yrs. ago. After lots of fight, writing mails, e-mails, phone calls they just patched but not repaired. Today my said car (Alto) is old and I'm planning to buy Chevy Sail or Toyota Etios Diesel since my monthly running is > 1200 km/month...