Hyundai's Journey In India, from being a competitor to Maruti both in Price and Quality to becoming a manufacturer, who can get away with pricing a Hatchback at 15 Lakhs, should be a case study for all auto manufacturers.
And the most significant aspect of their journey is the way they have managed their perception. They are not classified as a cheap option, Like MSIL, nor an expensive one Like a Honda or a VW.
Even when a car like Verna, is priced as much as a Honda City or a VW Vento..
Toyota found a niche and stuck to it, but failed everywhere else
Hyundai, somehow managed to straddle across segments & Price brackets, and is successful
And every segment they entered, they have significantly managed to increase their prices, without suffering a drop in sales
I Know Maruti Has close to 50% market share in India.
But I am pretty sure, Hyundai India's profits would be close to MSIL, if not more.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
It's good that Indian government wants to become self sufficient in production and manufacturing. But merely reiterating it at every juncture won't suffice. I sincerely hope that the govt takes some lessons from WW2, on manufacturing transformation.
When US went to war in 1941, the defence situation was ultra bad. The army didn't have enough guns & they were manufacturing only 3000 planes. On the other side was Nazi Germany who were already in the war for 2 years by then and were technology pioneers
However, in the next three years, US took such a leap, that they built more tanks, ships, aircraft in One year, than what their enemies built in six years.
In fact US built more shipping in the first half of 1944, than what Japan managed in seven years.
Immanuel Nobel, was a Swedish Inventor, who had three sons, Robert, Ludvig and Alfred.
Other Than inventing routine stuff, he was also ultra interested in explosives. Once, during his visit to Russia, he impressed the Tsar with his awesomeness. As a result, he settled in Russia.
His Son Robert, took forward his legacy. Once, as a part of business, he got a huge rifle contract for the Russian Army. So he sent his Brother Luvig, to Baku, to procure some wood for the rifle butt.
When Ludvig reached Baku, he found oil literally coming out of everywhere.
There was so much oil, thag people didn't know what to do with it. There were actual oil fountains.
Given that there were no mobile phones at that time, He decided to spend the 25000 roubles that he had for wood, and bought an oil refinery.
We often keep hearing, "Company A is awesome because it is valued at 1 Trillion USD. Company B is amazing because it is valued at 3 Trillion USD"
We are so beholden to th western benchmarks of valuation, that we sometimes ignore everthing else.
For eg, How will you value Amul?
It guarantees farmers minimum income. Always increases input costs while keeping output cost as low as possible. It never refuses to procurement from the farmer, even if there is a glut.
And finally, thanks to Amul, millions of people have come out poverty, got an education.
And then moved up the economic ladder, and are tax paying citizens, in the highest brackets.
Where in the Western model of Valuation do you fit all this in?
Sometimes I feel the Indian model of Capitalism is very mature and socially conscious.
The year is 1948. India is newly independent. You are from an elite family, who was just graduated from the Michigan state University, on Govt Scholarship and have come back to India.
You would think you life is all set and you are going to live happily ever after.
Then the Govt sends you to a rundown village in Gujarat, that nobody has heard of. Then they put you up in a grimy, sweltering car garage.
And then ask you, an English Speaking gentleman, to work with farmers, who can speak only Gujarati, a language you have no clue about.
And they ask you do it at a salary that is 20% of what you will get in the outside world.
You have three options. Either you run away. YOu suck it up for sometime and then run away. Or You start a revolution.
If your name is Dr Verghese Kurien, you choose option 3.
TBH, the new Indian jersey looks more like a Cheap promotional flyer, stuck on a tree in a residential colony, instead of the jersey of a team that is controlled by one of the richest sporting bodies of the planet and represents a billion people.
When you give out a kit contract, you give it to companies who do this for a living.
Not to a company, whose continued existence in India depends on a mere legal technicality.
Sad part is, they used the 1992 Cricket World cup jersey to do this.
A jersey that most will agree, is one of the best, if not the best, jerseys ever worn by an Indian cricket team.