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Consumer Tastes From Tier 1, 2 & 3 Cities Are Getting Blurred When It Comes To Buying A Car: Manohar Bhat

In an interview with BW Businessworld, Bhat talks about the taste of the consumer in different when it comes to buying a care


Manohar Bhat, who was roped in by Kia Motors India as its Head of marketing and sales early this year, maintained that his primary focus will be on building volumes in the domestic market rather than getting aggressive with exports. After already having worked with market leaders like Hyundai and Maruti Suzuki, he is confident to make 'Kia' brand a household name in India. While interacting with BW Businessworld recently, he opined that the difference in Indian consumer tastes and preferences from tier-1, tier-2, and tier -3 cities are increasingly getting blurred when it comes to buying a car. 

Edited excerpts:

You have already had prominent roles in two leading carmakers. What kind of learnings have you derived from there which you are incorporating in Kia Motors?
The learnings are very simple. Ultimately, you have to delight your customers and give him exactly what they want. Obviously, it covers everything. Firstly, the product should be what the customer wants. Secondly, it should be at a place where he wants. The service and the sales should be convenient to him. The price should be a very decent one. Afterwards, the after-sales services should also be up to the mark. It is easier said than done. At the end of the day, you have to be perfect on all fronts.  Whenever a manufacturer has lost out on one or two (aspect), (it) has failed. As (for) Kia as far as the product goes, we have what it takes to succeed in India.  Kia is known worldwide for its very distinctive and youthful design, which stands out. We have got a clean slate today on which we can write the Kia story.

Do you think Kia is foraying into India at the right juncture?
I would say this is one of the best times to enter here. In case I have entered a market like the US, I might have problems there. This is because the Indian economy is booming. As a result of that, the car market is also booming. Everyone says that India will be the third largest market in three years' time. So the headroom here is huge as cars per thousand people is very low i.e. less than 30 or something.  But for a market like China, it is 120+ (per thousand people).  So there is a room for all. If Maruti and Hyundai are expanding, it's good for them. There is a space for all and the market is not too crowded. The demand for vehicles is not going to go down in a hurry. In fact, the market will grow in double digits.  As the economy is slated to grow, the purchasing power and the desire of people to have their own personal mobility solution is going to go up.

How would you differentiate your product lines from your peers?

See, our cars are going to be distinctive which the customers will be proud to own. The way it looks behaves with him, and the way he feels it, etc., is going to be unique. Whatever we are going to provide in the car is going to make that guy feel proud to be a Kia customer.  That is going to be our basic pitch for the products.

You have unveiled the SP Concept SUV at the Auto Expo 2018 and will be coming out with its production version next year? But don't you think cracking the SUV market would be a challenge as it is getting hyper-competitive here?
The way I analyse the market is, the demand is going up majorly for bigger cars in tier-I and tier-II cities.  They don't look at the smallest vehicle like (Tata) Nano, (Renault) Kwid, (Maruti Suzuki) Alto, (etc.) as the first vehicle. Their aspirations are going up to bigger cars.  Likewise, there are many people who have shifted from that. They are looking at bigger cars like SUVs.  So the demand for the SUV segment and for the (Rs.) 8-10 lakh segment is really growing. To that extent, we are in the right place and possibly (at) the right time also. The vehicle (production version of SP Concept) would be (positioned in) the mid SUV (segment) and would be competing with (Hyundai) Creta, (Renault) Duster, (Nissan) Terrano, etc.  As far as competition is concerned, we welcome that.  If the market is growing faster (in that segment), we will also be there and are sure about our product.

Do we see some mass market products from Kia's stable for the Indian market?
Yes, of course. Every six to nine months, we will come out with new products. Overall, we will be launching three new products in the next couple of years. We might also bring in a couple of CKDs (Completely Knocked Down) depending on what we feel the Indian consumer is demanding.  As you could see from the (products displayed at) the Auto Expo, we have an entire range to select from our global portfolio. We are still doing a due diligence on what will be the good product to get in, maybe as a CKD also. Along with that, we will be having at least three products, which are mass produced at our factory, in the next one and a half or two years' time.

Are you working on any strategy to capture the consumers' mind space?
We started off at the Auto Expo (2018) by showcasing our product lines. The products which we had displayed there had its own distinctive design philosophy, which the (prospective) customers immediately grabbed. I am told that we are one of the most visited stalls and one of the most memorable (ones) also. People who visited our stalls saw that we are having our own identity. But obviously, we have only communicated to a very few people who have visited our stalls there (India Expo Mart). My task now is to slowly expand that communication footprint to the entire universe of people in the country. That is going to be done in stages. Obviously, it doesn't make sense to start shouting about it. I will be doing it stepwise. Nearer the launch, we will be more and more vocal.

Will it be safe to assume that your catchment areas would largely be in tier-I cities than tier-II and tier-III cities?
With the kind of internet (penetration) and digital revolution (that) have done in India today, I don't think it is a question of tier-1, tier-II or tier-III (cities). This is because there are informed customers everywhere. The requirements of the customer are uniform. India is a very young country. They know and appreciate a good design when they see it. They are very global in their outlook too. If you look at the culture in India today, it is a mishmash of everything. They are exposed to elements of various trends. For example, even the 'Gangnam Style' was a hit in India also. I think the definition (of) tier 1 and tier-II cities is flogged too much nowadays.  The difference in consumer tastes and preferences is getting, sort of, blurred now. In my view, tier-I and tier-II cities are merging into one bigger (market). Since we are a young design-oriented company, we would have traction not only in tier 1 but tier 2 and tier 3 cities also. Having said that, we would be appealing to the customers across (various cities). Our reach also is nearer the customers. It is not only in tier-I cities but also in smaller places. We will try to give a comfort level to our customer that wherever he buys a vehicle, he can get it serviced near him wherever he is (and) to the extent possible.

Are you also looking at shipping out products from India?
As far as our strategy is concerned, we are here for the Indian market. We have put up a capacity of 300 thousand (3 million per annum) at at Anantapur in Andhra Pradesh. That is mainly for the domestic market only. We are not like some of our competitors, who are selling here and are also into exports. We are not into that game. Peripherally, we might do the small number of exports. We are trying to be a major player in the domestic market. Unless we are strong here, we don't believe that it makes sense (for us) to try exports.

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