Merger planned between Fiat Chrysler and Peugeot

If Fiat Chrysler and Peugeot complete their just-announced merger, the resulting firm will be the industry's fourth largest.

Read more about this merger here.

Updating the Tata Nano marketing plan

The Tata Nano was launched in India in 2009 under the marketing theme of 'world's cheapest car' with a target market of people (particularly families) who had never owned a car. Its positioning was supported by basic auto features and a low, low base price. Tata's CEO told the Guardian, 'Here in India we see four people travelling by motorbike ... I thought they could travel more safely by car'. Tata was so overwhelmed by orders that it instituted a lottery to select the first buyers.

Now the Nano's marketing plan is being revamped - again - after lower-than-expected sales and reports that the car failed to meet minimum UN auto safety standards. Apparently, many consumers don't want to drive a car with such a low-price image.

The Nano wasn't the only tiny car to fail crash tests, by the way. The other four made-for-India cars that rated zero on a safety scale of 1 to 5 were: Maruti Suzuki Alto 800, Hyundai i10, Ford Figo and Volkswagen Polo. Without air bags, these no-frills autos couldn't pass the crash tests, even though they all meet India's safety guidelines.

Scientist Raghunath Mashelkar, who is on Tata's board of directors, blames poor marketing for the Nano's poor results (and Tata's former CEO agrees). Mashelkar says: 'The Nano is such a great product, it has 86 patents. So, excellence should have been put at the front, and affordability at the back'. In other words, the Nano should have been positioned on the basis of innovation rather than low price.

For the new marketing plan, Tata is positioning its Nano Twist as a car with style and excellent fuel efficiency. The marketing reflects a target market of young couples and features fashion colours and extras such as power steering. Low price is not the primary message. Will the new marketing plan reignite Nano's sales in 2014?

Virtual showrooms and brand experiences help buyers buy

A growing number of people--Millennials in particular--are configuring cars through virtual showrooms and browsing automotive brands outside the real-world showroom. One reason: They don't want the 'hard sell,' they want to browse and buy at their own pace.

This is one of the key findings of a recent GfK survey of car buyers, in which more than 75% of respondents agreed with the statement 'If I went to a dealership, I wouldn’t want to be sold a car. I’d rather look at the cars and then approach a sales person when I’m ready'.

Here are a few ways that automakers are helping buyers experience their brands and move toward a purchase.

• Audi City is an online and in-person virtual experience of selected models in life-size form. Consumers can design the Audi of their dreams. At the Audi City showroom in Mayfair, London, visitors can use interactive screens to explore various options, see cars in action, etc. It's a social media experience, too, on Facebook, as well as on Twitter.
• Nissan Innovation Centre at London's O2 Arena is a non-dealership devoted to giving consumers a positive brand experience without sales pressure. Prospective buyers can even take Nissan models for test-drives--especially important for newer models like the electric Leaf, which are seeking much higher market share in a challenging economic environment. 'Few manufacturers rely solely on the dealership for marketing but this is the customer’s key touchpoint at the end of the purchase process', says Nissan's GB marketing director.
• Telegraph Festival of Motoring, launched earlier this year, is the newspaper's virtual supplement featuring six automotive brands: Alfa Romeo, Kia, Volvo, Honda, Audi and Vauxhall. Videos, webinars, online chats and more offered the opportunity for car buyers and brand fans to see the latest and greatest, ask questions and get a peek at future designs. No hard sell, just a fun brand experience.

Market share challenges

Companies often announce their long-term market share goals, not only to guide strategy but also to signal competitive aggressiveness and give stakeholders (employees, customers, suppliers and more) a very positive view of the firm's future. Of course, once goals are set, the firms must also measure and explain their progress toward these future targets.

Actually determining market share isn't easy for some industries or products . . . but it's very easy in the automotive market, where performance measures such as the number of car registrations are readily available. Numbers alone don't tell the whole story: it's important to look at trends over time and see the big picture of what's happening in the overall market.

The auto lobby group ACEA believes European car sales will again shrink this year, which means automakers will be fighting each other for sales there rather than increasing the size of the overall market. Given the difficult economic situation and the intense competitive rivalry, achieving share increases will be a real challenge.

Opel has been losing share in Germany since 2005. Now it has set a goal of reversing the trend and attaining a 10% share of that market in the coming years. Can Opel turn that goal into reality?

Meanwhile, South Korea's Kia and Hyundai are putting extra marketing muscle into connecting with sports fans in Europe, with the result that their market share is going up. As they continue to move upmarket, how deeply will these companies cut into the share of European car firms that have traditionally been strong in their home market?

Year of the Dragon at Beijing Auto Show

Daimler's new 'smart Dragon' car

As many as 800,000 people are attending this week's auto show in Beijing, attracted by dozens of new concept cars and new model-year cars. China is the world's largest market for passenger vehicles; luxury cars accounted for nearly 8% of Chinese auto sales last year. SUV sales are strong, and brands such as Jeep are popular in China for the outdoor lifestyle they represent.

A number of models have been named for the Year of the Dragon, including a super-compact smart car from Daimler (above) and luxury cars such as the Rolls-Royce Year of the Dragon Phantom. The bespoke Phantom, available with many custom options, sold out the entire year's production in only 8 weeks--indicating that the appetite for upmarket consumer goods continues to be very strong in China.

The Aston Martin Dragon88 costs 5 million yuan, not as much as the Phantom, yet buyers are crowding in to look at it and pay deposits, since only 88 of these cars will be produced. For a gallery of photos from the show, click here.

Made-in-India autos drive into South Africa

The South African car market is alive with import activity from India:

• Toyota Kirloskar (the Indian joint venture of Japan's Toyota) will begin marketing small cars in South Africa from spring of 2012. Shown above is the Etios, one of the made-in-India autos to be sold in South Africa. 
• India's Tata Motors already sells a hatchback, several small car models, its Xenon pickup truck and its Safari SUV in South Africa through a joint venture. Next it will bring its Manza cars and Prima trucks to the market.
• Mahindra & Mahindra has introduced its XUV SUV in South Africa, part of its global expansion.

Other imports competing in the South African market include Peugeot, Fiat, Dodge and Mitsubishi. As the worldwide economy improves, watch for South Africa's car market to become even more attractive.

Super-sub-compact cars in India

Sales of super-sub-compact cars like Maruti Suzuki's Swift, GM's Spark and Hyundai's Santro are accelerating in India. Basic models lead the market, although larger vehicles appeal to specific customer segments.

Maruti Suzuki forecasts more than 18% growth in 2010, fueled in part by sales of the new EECO van (with 5 or 7 seats), which should sell about 40,000 units in the coming year.

Big year-end deals are helping to boost demand while the automakers look toward better revenue as global economic turmoil subsides and consumers feel more confident about spending once again. As auto demand improves and industry turnover rises, demand for parts, accessories and related services will improve, contributing to the economic recovery worldwide.