The Hindu Business Line : For customer car seva

Automobiles are a tough sell these days, but manufacturers are trying their best to think out-of-the-box, from organising golf tourneys to interactions with top management..

Today’s tough times are seeing auto makers reach out to customers more through direct marketing and the Internet.

Priyanka Vyas

Manu P. Toms

What is the Swift’s mileage? Can the Hyundai i20 beat the Swift? Will Swift be able to hold its position after Honda Jazz? Which car should I buy, Swift or Wagon R? These are just a few of the questions which you may want to check at a car de alership to decide on the car you intend to own and its strengths vis-À-vis its competition. But for young, tech-savvy and passionate car buyers, many of the questions are being answered through social networking communities. Recently, Maruti Suzuki said it would tap this audience by setting up a community portal exclusively for Swift owners.

This is just one example of a niche strategy through which the auto industry is reaching out to its prospective buyers. In the present economic scenario, the auto industry is facing the challenge of reviving the market sentiment without increasing its advertising budgets in a major way. With uncertainty in the job market and the perception of banks being tough on financing a vehicle, automobile companies are looking more at direct and niche marketing to lure customers to their showrooms rather than the traditional media of print and television.

“We estimate that of the 2,000 various communities on Orkut, 50,000 users are Swift owners. We are targeting this community of bloggers. We have increased our digital ad spends by 4-5 per cent compared to print. This helps us limit our per vehicle spend,” says Shashank Srivastava, Chief General Manager, Maruti Suzuki.

According to estimates of media agencies, Maruti’s spend per vehicle is estimated to be Rs 4,000. As against this, Hyundai’s spend is Rs 8,000 and Tata Motors’ Rs 16,000. Companies are hoping that through more customer engagement activities such as test drives, road shows and financing options, they will be able to create excitement among the buyers at lower costs.

“We do not have big advertising budgets. What we try to do is go to colleges, offer students test rides and promote safe driving in a fun manner,” says N. K. Rattan, who heads marketing at Honda Motorcycles and Scooters India (HMSI). For its 125 cc bike Stunner, which is becoming an eye-catcher among college-going students, Honda used both radio and direct marketing to reach out to its customers. Recently, it went to 23 colleges and offered test rides to almost one lakh students promoting both safe riding and its brand. Sales numbers too are revealing the same tale. Despite being a young player, HMSI has emerged as the fastest growing two-wheeler company. This is happening at a time when many other players have been witnessing shrinking sales numbers.

Korean car maker Hyundai Motors India too intends test-marketing across 500 villages in the country very soon. In the next two months, it will go to the mandis and to the remote interiors where there is no Hyundai dealership. Earlier, for its popular selling hatchback, the i10, Hyundai organised the Kappa Challenge across 10 cities. Customers were given the new i10 with the Kappa engine for a test drive in a particular belt along with rival cars. This new engine weighs four kilos less and hence is about 5 per cent more fuel-efficient. It delivers 10-15 per cent more power and torque than the existing cast iron engine. The challenge was aimed at gauging the engine power and fuel efficiency vis-a-vis other competitors. “Almost 10,000 people participated across the 10 cities,” said a spokesperson for Hyundai Motors.

Utility major Mahindra & Mahindra too, which has launched the multipurpose vehicle Xylo, expects a big push in sales from the rural market. The company says that it identifies local festivals to market its products to the customers. “As walk-in customers are very few, we have to reach out to the customers. So we organise road shows in upcountry areas keeping some of the regional festivals in mind.” With such efforts, along with finance options, it draws the attention of the crowds. Recently, the company organised its road shows during Lohri, a popular festival in North India that falls in mid-January.

The strategy also resonates with premium car makers. Porsche, the world’s most premium sports car maker, finds it is mainly direct marketing that works considering the niche category of car buyers that it serves. Its models, such as the Cayanne, Boxster and Coupe, are priced above Rs 50-60 lakh and go as high as Rs 1 crore and more.

“We primarily use targeted direct communication rather than advertising to introduce our cars to prospective customers. For the new Panamera, the first four-door sports car from Porsche, we have largely communicated with our prospective customers through exclusive mailers and have received a very good response. In fact, we have already taken forward bookings for the Panamera without buyers having even seen the car,” explains Rod Wallace, Managing Director, Precision Cars.

Honda Siel Cars India, which recently launched a more expensive version of its top-end model Accord, says it has never gone into mass advertising in a big way. “It is primarily targeted at CEOs and CFOs, so we invited many top company officials to our plant, giving them test drives and an overall feel of the product,” explains a Honda official.

Apart from mass media advertisements and dealer-level initiatives, high-end car makers usually associate with lifestyle events such as fashion shows and organise social gatherings.

Mercedes Benz annually organises the Mercedes Trophy golf tournament and fashion show for its customers while Audi associates with Wills Lifestyle India Fashion Week. The Czech-based Skoda associates with Lakme India Fashion Week.

“The annual golf tournament is part of our customer relations management. We spend a day with our customers on the golf course,” says Suhas Kadlaskar, Director (Corporate Affairs), Mercedes Benz India. “Sustaining our relationships with the existing customers is central to our sales strategy. They buy new Mercedes models and add them to their existing ones and they introduce us to new customers,” he explains.

Thomas Kuehl, Board Member (Sales and Marketing), Skoda India, endorses this view. “When I am at Lakme Fashion Week I meet more customers. I can run around and ask what they feel about our cars. I believe in face-to-face marketing,” he says.

Similarly, Fiat has a definitive marketing strategy for its two-door Cinquecento (Fiat 500) which targets the rich and celebrities. “The car has been taken to the target customer through premium mall displays such as Atria in Mumbai and Select City Walk in Delhi. We also do innovative back-lit displays in ‘happening hang-out’ spots such as pubs and night-clubs,” says Tarun Khanna, Head (Marketing), Fiat India Automobiles Ltd.

The super luxury brand Rolls Royce has a different sales model. It relies more on direct marketing in a social gathering where potential customers – high net worth individuals – chat with the Rolls Royce officials about the car and its specifications. In his last visit to India in September 2008, Graeme Grieve, Global Marketing Director, Rolls Royce, individually held talks with 16 potential customers in three days.

According to Pradeep Saxena, Vice-President, TNS, the Internet and test drive are emerging to be an effective tool of communication to car buyers. “Test drives are now ranked among the top five factors influencing the decision of car buyers.”

Related Stories:
Govt issues draft guidelines for auto loan disbursals
Car sales rise for first time after Sept ’08
Passenger car sales continue to slide

More Stories on : Customer Relationship Management | Cars | Strategy

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