List of 1000cc Petrol cars available in India

As discussed in the previous article,  Increasing traffic and petrol prices have led to a shift in the buying choices of the Indian customer. People are now buying cheapers cars that give better mileage to offset the running costs. This has led to even The American muscle car makers to enter the smaller engine segment. Most companies now have a 1200cc petrol engine but many cars now also have a smaller engine capacity thus saving money and making city commutes hassle free. Let's discuss the options available.

1. GM S-TeC 1.0:  General Motors bet on the entry level hatchback cars has been the company's most successful car to date. The S-Tec 1000 cc engine has been more powerful than the Alto 0.8 and 800DX cars from Maruti. The car has a 65bhp engine with a 91nm of Torque. The engine is good enough for the city and the occassional highway run. The engine is a carryover from the Daewoo buyout.The engine is available on one car

Chevrolet Spark 1.0

2. Ford Ecoboost 1.0: Fords trumpcard in India to enter maintstream segment and garner a huge marketshare has got a lot of takers. Small engine with big power is the mantra and Ford has worshipped it big time. The Engine makes 123bhp and 170nm of torque with the help of a Turbocharger. Ford markets the engine as being the size of an A4 size paper. The engine is currently available on one car right now.

Ford EcoSport 1.0

Hyundai 1.1 Epsilon (Irde): Hyundai is currently the second largest carmaker in the country. A major reason is the Hyundai Santro. Hyundai's mainstream car at one point in time. The car is powered by a 1100cc engine making 64 bhp  and 97nm of torque.The engine upgrade is now called IRDE. Two cars are powered by this engine.

Hyundai I10
Hyundai Santro.

 Hyundai 0.8 Epsilon: Hyundai has long played the cat and mouse game with Maruti Suzuki for entry level hatches. Finally they launched the smaller Hyundai Eon with a 0.8 Epsilon engine which is basically a smaller engine from the Santro, I10 lineup. The Engine makes 55bhp and 75nm from 1000cc. One car is currently powered by this engine.

Hyundai Eon

Maruti Suzuki K10B: A major part of the Maruti Modernization program was engine sharing amongst its entry level Models.  This led to the introduction of the K10 engine. The engine makes 67bhp of power and 91nm of Torque. Currently four models are powered by this engine.

Maruti Suzuki Alto K10
Maruti Suzuki A-Star
Maruti  Suzuki Zen Estilo
Maruti Suzuki Wagon R

Maruti Suzuki F8B:  800cc engines have been synonymous with Maruti Suzuki cars. But the company has been working overtime replacing the F8B with the K10B. The engine  makes 46bhp and and 62nm of torque. The engine is currently available in two cars.

Maruti Suzuki Alto
Maruti Suzuki Omni

Tata Nano Petrol: Tata's Value for money engine for the world has shaken the biggest of the carmakers by showing what is possible for a small price. The 624cc engine makes 38 bhp and 51nm of Torque. The engine powers three tata cars .

Tata Nano
Tata Magic Iris
Tata Ace Zip

Ten things Tata should do to turn into a global manufacturer Part II

I had written about  the problems at Tata motors back in September 2011. Tata motors although a major fighter for the second spot after Maruti in the Indian market back then, was already losing its edge over competition.  Today  Tata Motors has fell to fifth place and might soon fall to sixth if things don't improve.

 Here's an article I wrote in 2011 that all is not well in Tata Motors.

http://boyracer.blogspot.in/2011/09/ten-things-tata-should-do-to-turn-into.html

Mr.Ratan Tata, an avid car lover at heart (Parsi genes you see..) has during his tenure put everything in the company to keep it fighting fit. Now post his departure Tata motos has tried to rope in the MD of GM, India Mr. Karl Slym who has started working right away at trying to arrest sales, but minor facelifts have not work for Maruti, Ford, Honda or Tata ever. What else can Mr. Slym do for Tata Motors remains to be seen.

1. Image: Is your next car going to be one from Tata Motors? A majority will say No without hesitation.  Tata Motors has an image of a cheap truck and car maker. Customers buy Tata cars mostly because it is the cheapest in the segment or because they expect the product to withstand abuse.  In the Indian Market where people do not trust their own nations products, Tata has an uphill battle. Constant quality niggles make things worse.

Logo: The First and foremost thing Tata Motors should do is design a desirable Logo. The current logo has an industrial feel to it. Another major step in image upgrade is to renovate dealerships. Subway sandwich chain of restaurants have the same cooking stove, same breads, same wallpapers, same chairs and tables and menu all over the world. This is something that goes a long way in building an image.

Brand Ambassador: Chevrolet used Saif Ali Khan and Rani Mukherji, Renault uses Anil Kapoor for its Scala, Nissan used Ranbir Kapoors services, Mahindra used the services of Jimmy Shergill for its Verito. Tata needs to do the same. An actor who is smooth and refined will do wonders for the brand. Amir Khan is a known as a perfectionist and is already endorsing Titan brand for Tata.

Pricing: Pricing the car decides the impression it will create on the masses. A Tata Manza with more features and space is still viewed as a cheaper car than Honda City or Chevrolet Sail. Especially at a time when Tata Motors has taken a hit and is revamping its product portfolio, now is the best time to reposition their cars. A company that doesn't make profit is not doing business but charity. Tata can Price higher end models with more features over segment leaders in a bid to take away a chunk of their market share. With the use of Brand ambassadors, the company should target ads right at segment leaders.

2. Model perception: When tata launched the Upgrade to its Sumo, the Sumo Grande, the excellent car could not bring in customers. The problem was not with the model but with the image associated with Tata Sumo. The marketers were quick to rebrand it as just the Tata Grande but the damage was done. Today while the Innova sells in huge numbers, Tata Grande has been a tame seller.

The same issue has plagued Tata Indica Vista and Tata Indigo Manza.  The rebrand came too late for both the cars. The Manza is still seen as an upgrade to the Indigo and that is where the image of the car takes a huge hit. A strong awareness campaign needs to be put in place differentiating between the cars. Indigo Ecs (entry level compact sedan around 5 lacs), Indigo XL(re brand it lounge XL removing the INdigo name) (mid-size sedan around 7.5 lacs) and Tata Manza (c-segment at 8+ lacs). The same also holds true for the Nano, Indica and Vista and the Sumo and Grande.

3. Corporate grille:  What is common in a Chevrolet Beat, Sail and Cruze cars or Hyundai I10, i20, Verna, Elantra and Sonata cars? The grille and headlights that make up the front have a generalized design making it easy for customers to recognize the cars with the brand. Tata cars lack such a similar uniform grille and Headlamp combination. It brings a company brand recall when they see the look on many cars.

PS: A honecomb design with led taillights is a rare combination and should help Tata motors step up its image.

Also helpful would be bringing uniforms for sales staff, uniform brochures and catchy coloured led lightings that brighten up the showroom and look welcoming enough. Half the battle is won if the customer walks into the showroom.

4. Tata Nano: When Tata Nano was launched in India in 2008, it was the most talked about car in the world. But today, the car averages 1000-2000 units a month. In contrast, hyundai eon and i10 cars average 8000 units a month. Maruti Alto Averages 20000 units a month. So what went wrong? The car is much smaller than the models it competes with. To add insult to injury Tata motors decided to price it cheaper than the competing cars leading to lack of any image for this small wonder. Those who cannot afford a car still see Nano as a car and those who can have image issues.

A quick and extremely effective remedy will be to have a cheap base model but raise the price of other models with added features to compete with competitors at the same price. Targeting the college going youth will also add to the cars personality. Some extremely well marketed kei cars are  the Mitsubishi-i,  Toyota IQ and the Smart car. A custom accessories program where customers can customize the car for different colours, alloy wheels, upholstery, stereo etc will also help strengthen the cars appeal. Also instrumental to the cars success is a doze of premiumness like a 2-seater convertible. DC designs has shown a nice convertible concept based on the Nano recently.

PS: A fasttrack edition Nano?

5. Comeptitive pricing and segmentation: Hyundai as a carmaker has successfully played the pricing card over time. The initial models of Hyundai (Accent, Santro) were priced below competition to lure in sales. But over time Hyundai has increased the prices of its cars slowly and gradually. Now Some of their cars are also priced higher then segment leaders. For e.g. When Honda City used to sell at 8-10 lacs price range, Hyundai sold the Accent at 6-8 lacs price range with competitive features. The accent replacement (Verna) saw prices rise higher at 7-9 lacs. The latest Hyundai Verna is now priced on par with Honda city and even higher. Correct compeitive pricing is an important aspect as it helps the carmaker make the customer see how they have envisioned the car and the level at which it is targeted.

Tata's flagship Aria falls in a no mans land. While most people compare Xuv500 to Safari Storme. Aria sales are also dismal. This is a big opportunity for Tata to peg the Aria straight into the Ford Endeavour/ Ssangyong Rexton/ Toyota Fortuner territory. Although Quality levels and feature list needs to be improved. This will help the company command better profit margins and enter the premium market.

I would also strongly suggest the company to launch Magic Iris to help Nano compete with the 800/Alto/K10, Eon and Spark cars. I've mentioned before on numerous occassions how maruti has succesfully played the two car card for each competing segment. Alto-Astar, Estilo-WagonR, Ritz-Swift are strong examples. Hence Magic Iris can help Nano increase the product visibility and bring in volumes.

PricingAria higher brings Storme right into the XUV500 territory which is selling like hot cakes. Another excellent opportunity to increase profit margins. Tata Aria has not been able to sustain sales against the XUV500 but Tata Safari is a succesful platform and commands respect and legacy. This will help Safari storme rake in higher sales by eating into the XUV500 sales. It is given that Safari needs to be kitted to the gills just like the XUV500 to keep the fight strong.

Similary Tata Grande MKII should be targeted at Mahindra Scorpio (both have similar size and engine power and tall UV stance), maruti Ertiga and Renault Duster. while Tata Sumo should be targeted at Mahindra Bolero and Maruti Eeco.

To tap into the potential customer market, Tata motors should Bring in Tata Winger in retail sales to compete with the likes of Chevrolet Enjoy, Nissan Evalia, Toyota Innova and Mahindra Xylo. Similarly Toyota Venture should be introduced to compete with Mahindra Quanto and Maruti Omni.

It is visible how the stress is more on Mahindra Cars mostly and then Maruti cars. The reason is both Tata and Mahindra are basically UV makers and hence their vehicles share lots of segmentation. While maruti on the other hand is the largest car maker with presence in most segments.

6. Timely Innovations: To beat competition, you have to excel the competition. Tata motors has offlate only played catch up with other companies. Whether its adopting a Common rail engine or climate control features, navigation functions or automatic transmission. I had mentioned two years ago how Tata motors strongly needs an Automatic transmission in its portfolio. Even today the company doesnt have an AT gearbox while all other carmakers including Archaic Maruti Suzuki and Mahindra also have one. Tata needs to pay attention to certain necessary points such as

-. Turbopetrol configurations: Turbopetrol engine are becoming the norm since carmakers are restricted by government to stick to smaller engines. Turbochargers provide higher power and fuel efficiency at the same time. Succesful cars are Fiat Linea T-jet, Ford Ecosport, Skoda Laura, Vw Polo GT and Vw Jetta. THis should help Tata motors compete with competition on power and fuel efficiency figures. Also minor upgrades to the engine weights and performance will go a long way in helping the company get back into consideration of the family car buyers.

-. Weight control: All Tata cars weigh higher than competing cars affecting overall performance of the cars. With ABS and Airbags becoming the norm, Steel guage is no more the measure of safety. The company needs to control weight on all its cars from Nano to Aria.

-Advanced transmission boxes: Newer cars are coming up with 6-speed gearbox, the higher ratios helping cars achieve better fuel efficiency figures. In such situation Tata should take the first step towards bringing 6-sp manual boxes to the entry level cars such as Indica and Vista. The company has recently announced a 6-sp Automatic transmissions for its Aria. Tata can easily achieve higher sales by introducing an automatic with its diesel engines for hatchbacks, a segment where Automatics are completely absent.

- Newer grille designs and bumper designs are no considered innovation and car manufacturers should accept that fact quickly. Blacked out headlights are a thing of the past. Better Try honeycomb lights with led bulbs, sunroof and adjustable rear seatbacks.

7. Design: Humans define beauty by what they see. Apart from Tata Safari Storme, no other car is commended for its looks. Also disrupting sales is the fact that the Manza, XL and ECS and Indica and Vista look very similar. The Tata Nano has a very unique design but its association as a cheap car is washing up any benefits it should receive. It might cost the company huge investments to get help from a reputed design house but refreshing designs are the need of the day.

 
 Fine tune performances to match the market leaders including the European car makers to match fuel efficiency and performance figures. weight loss for each model. One cannot beat a deadbat and expect it to fly in daylight and the same applies to the outdated models in the lineup such as ECs, Indica and Indigo XL. Snazzy colours and Designs, upholstery. Hyundai has creatively used the Accent to fill in the void of a sedan below its Verna till date.

8. Cost saving: Saving costs is a crucial part of a business. Tata motors has also seen loss pile up year over year affecting sustainability. The company should use unofirm parts for multiple platforms to save costs and work on improving Panel gaps and interior quality. Steering wheel coloums on the Aria, Sumo, Safari, Grande and Winger and Ecs, XL, Manza, Indica, Vista and Nano cars should be a start.Similarly Safety belts, Tyres, Emblems, Upholstry material can be used effectively.

9. Marketing: Only sales cannot sustain sales for a company. Tata motors need to put in place a strong marketing strategy. Tata motors has a huge existing customer base so it can be utilized via customer loyalty to boost sales. As suggested before Tata motors needs to cover the higher margins with competing cars but needs to keep a similarly equipped cars priced marginally low. Hold customer loyalty events and reward them with non automobile related gifts such as titan watches or Tata Steel stocks. Tie-up with non auto premium brands like Titan watches and Tanishq jewelry .

10.  Business: No company is a business if it is not making profits. Loss making operations and manpower needs to be trimmed. The company needs to think profits first and customer service later.No fixes can take care of sales in the short term but being prepared for the fight when the recession is over will help the company survive in the long run.

Random thoughts

A 1400CC Dicor SUMO?
A 6-sp AT Safari Storme (along with the Aria)?
A Turbo Vista Petrol (from the Fiat T-jet)?
A mini Aria to fight the bigger hatchbacks with a 1.3 Multijet?

Oldest Nameplates still in production part II: Chevrolet Impala

This article is a followup to
http://boyracer.blogspot.in/2013/01/oldest-nameplates-still-in-production.html

Few models have a major hand in deifining the North American Automobile industry like the Chevrolet Impala. Identified by its triple symmetrical tail lights, the car has become a best seller for GM raking in the much needed money over the years. But unlike other nameplates still in production, this car has not had a constant run thanks to top management reshuffles and product lineup goofups.

Impala: An Impala is a medium-sized African Antelope.

First generation (1957-1958)

The Impala was manufactured in 1957 as a top of the line full-size economy cars alongwith Belair. The car had many distinguishing design features compared to other chevy's such as the tailfins at the rear and the triple symmetrical tail lights. This car was available in a 2-door convertible and 2-door hardtop version with a 3.0L I6, 4.6L v8 and a 5.7L V8 engines. The cars also had the cross flagged insignias now only found on the Corvettes. This car had a major hand in helping GM retain the no.1 spot as worlds largest car maker.

Second Generation (1958-1960)
The early years in car industry did not see a new generation car every year. But after the success of First Imapala and the feedback received by the company, the second generation came out in 1958. The car was heavily reworked and the chassis and bodywork was shared with entry level Buicks and Pontiacs. The tailfins at the tail were more pronounced but the triple taillights were given a miss but returned in the 1960 model. The second generation was basically hurried to give Impala a brand in itself instead of being sold as Belair. The 1959 car also had a distinct nostril design between the headlights and the Bonnet which was removed in the 1960 design. The cars sported a a new 3.9L I6 but retained the 4.6L v8 and 5.7L v8 engines.

Third Generation (1960-1964)

With the onset of the 70's the cars were losing their angles and becoming more boxy when it came to looks. The tailfins of the Impala were lost in the Third generation. The Tapered B-pillar design continued. A special edition Impala with bubble glass roof  (streching from Windshield to Boot) was launched. Engine options included a 3.8L I6, 4.6L V8, 5.4L V8, 6.7L V8 and a 7.0L V8.

Fourth Generation (1964-1970)

The fourth Generation Impala continued to be more subtle and simpler and more boxy.  The Impala was at the time one of the largest selling cars in the U.S. alongwith the likes of Ford Mustang. To cater to the demand, the Chevrolet Impala was made across 12 plants in the U.S. and Canada. In total, the fourth Generation Impala helped cement its place in the world as the fourth largest selling car in the world.  Ten engine options were on offer. 4.1L I6, 4.6L V8, 5.0L V8, 5.4L V8, 5.7L V8, 6.5L V8, 6.6L V8, 6.7L V8, 7.0L V8 and 7.4L V8.

Fifth Generation (1971-1976)

The sales success of the Chevrolet Impala continued through the early 70's. Various bodystyles were launched by Chevrolet to sustain sales such as a fastback version (aka Mustang), a bubbletop roof version and stations Wagons. The fifth generation Impala designs were streamlined in general and engine choices were also brought down to 5. A 4.1L I6, 5.7V8, 6.6L V8 turbo, 6.6L V8 NA, and 7.4L V8 options.

Sixth Generation (1976-1985)

The Sixth Generation marked the end of the beautiful American cars and the onset of wierd designs. The boxy muscle car designs were gone. Also gone were the big sized cars. The new Impalas were considerably smaller than previous versions thanks to the increased Japanese Invasion. Fortunately, the car still ruled as one of the largest selling cars in the North American market. While bodystyles decreased, engine options increased to 6. A 3.6L V6 replaced the old gen I6 engine along with a 4.1L V6. A diesel V8 engine was also added to the lineup.

Seventh Generation (1994-1996)

The big American Carmakers had started bowing down to the Japanese onslaught in the Automobile sector. The seventh generation Impala was smaller than before and the classic styling cues were absent too. This was also the last time the older Impala platform was used which was in continuous production since 1959. The sport tuned suspension and the black hues was a huge hit amongst the cops. Only one engine was offered, a 5.7L V8 and only a 4 door sedan bodystyle was offered. Increased competition and reliablity killed the Impala name in 1996. The triple ring tail lights was gone too.

Eighth Generation (1999-2005)

With the last of the old school Impala production ending, The fortunes at General Motors had also turned. Fighting with the Japanese onslaught, even American cars were becoming a me too design tough to distinguish in the market. Finally, a revision program brought back the Eighth Generation Impala in 1999. The Impala again provided a much needed boost in sales for GM being the largest selling cab car in the North America. The new Impala was a Front wheel drive car with only a 3.4L V6 and 3.8L V6 options available. The circular tailights and the running impala logo had returned on the car.

Ninth Generation ( 2005-2013)

In an attempt to win back marketshare and money, GM did a half hearted redesign of the Eighth Generation Impala. The ringed tail lights were lost but the running Impala logo was retained until 2008. A 3.5L V6, 3.6L V6, 3.9L V6 and a 5.3L v8 engine were offered. Also new on this car was a 6-speed automatic. Various minor refreshes continued over the 8 years trying to arrest falling sales for an outdated car with low fuel efficiency.

Tenth Generation (2013- Present)

Post Bankruptcy, GM adopted a new design philosophy. The Tenth Generation Impala received modern design cues on the lines of the 70's muscle car designs. The larger size of the sedan has been restored. Only a 4-door sedan version will be offered. Also new for the tenth generation Impala are the smaller 2.4L I4, 2.5L I4 and 3.6L V6 engines. The ringed tail lights have been deleted but the running Impala on the C-pillar has been retained.

Legends of Wheels Part VI: Fallon McElligott 'The Skoda revolution'

This article is the sixth part of the 'Legends of Wheels' Series.

http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-isergio.html
http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-ii-carlos-ghosn.html
http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-iii-lee-iacocca.html
http://boyracer.blogspot.in/2012/05/legends-of-wheels-part-iv-siddharth-lal.html
http://boyracer.blogspot.in/2012/06/legends-of-wheels-part-v-alan-mulally.html

For the sixth edition of 'Legends of Wheels' it has taken me close to a month to compile. Also, this time the issue is not about one person but an agency Fallon McElligot.

Often described as 'the laughing stock' of the automotive world until the late 90's. Skoda's reputation as a carmaker languished until Volkswagen's takeover in 1991. The jokes went something like this

"How do you double the value of a Skoda? Fill up the petrol tank!"

Why do skodas have heated rear windscreens? To keep your hands warm while you are pushing it. 

Why do Skodas have a rear wash wipe ? To remove the flies that crash into them. 

Got a wing mirror for a skoda? Okay, seems like a fair swap 

What do you call a skoda driver who say's he has a speeding ticket ? A Dreamer 

What colour shall I get my skoda in? It doesn't matter, it'll go brown through rust after a week

What do you call a Skoda at the top of a hill? A miracleWhat do you call 2 Skodas at the top of a hill? A mirage. 

Skoda's had a reputation for being unreliable in Europe when VW took over the company. The company was run by the state and quality control was almost absent. Backed by Volkswagen Group expertise and investments, the design—both style and engineering—has improved greatly. The 1994 model Felicia was effectively a reskin of the Favorit, but quality improvements helped, and in the Czech Republic the car was good value for money and became popular. As technical development progressed and attractive new models were brought to market, Škoda's image was initially slow to improve. In the UK, a major turnabout was achieved with the ironic "It is a Škoda, honest" campaign, which was started in the early 2000s.

By 2005 Skoda was selling over 30,000 cars a year in the UK, a market share of over 1%. For the first time in its UK history, a waiting list developed for deliveries by Skoda. Skoda owners in the UK have consistently ranked the brand at or near the top of the J.D. Power customer satisfaction survey since the 2000s.

In truth, Skoda has a rich history and is one of the world's oldest vehicle manufacturers, having been established in the 1890s first building bicycles, then motorcycles and finally cars. It's heyday was before WWII, then as the century evolved, with Communism in charge of what eventually became the Czech Republic, quality, engineering development and performance took a back seat to egalitarian affordability.

Sales started picking up immidiately. The reduction of state intervention and VW inputs also helped as Skoda's upped their reliability and match customer expectations. Six accolades were awarded for work carried out by Škoda’s advertising agency, Fallon, and direct marketing agency, Archibald Ingall Stretton (AIS) in 2002. The gold was awarded for the highly distinctive and popular "It’s a Škoda. Honest" campaign, which dramatically influenced people’s perception of the brand and contributed to Škoda’s rapid sales growth in the UK.y marketing the unreliable history, the company stood at high risk of damaging the little market share they had.  Fallon McElligot benefitted in that VW gave them a free hand with the brands marketing efforts. 

In an ultra-competitive industry suffering from chronic overcapacity, Skoda has proven it has what it takes to compete with the best in the business.  Because of the shortage of skilled labour that affected so many enterprises in socialist societies, Skoda employed many prisoners. They made up 90 per cent of the pressing plant, for instance. When they were freed during political amnesties in January 1990, it left a gaping hole in the factory's labour force: higher wages could not tempt them back. In one of the ironies of history, conscript soldiers were briefly ordered to fill their places but because they were less skilled, production remained far below demand and Skoda's debts, acquired in the 1980s, continued to grow.

Skoda continued selling the Favorit, an Italian-designed hatchback which had debuted in the late 1980s, but it was a stopgap move. Among the many changes were those connected to labour traditions, but there were initial problems. Though Skoda workers were sent to VW's Wolfsburg plant for training, their productivity did not immediately improve. They had adopted a very flexible, improvisatory way of working during Communism which contrasted greatly with those ways demanded by the Japanese methods employed by VW, where precise just-in-time processes were required and the foreman was the absolute boss.

It soon became clear that the methods taught in Wolfsburg would not work on the local production line. There was also irritation that the German managers, skilled only in economics, were overlooking the Czech workers' vast technical skills. "We didn't know a lot about Western advertising or marketing, but we did know how to build cars," one engineer told Pavlinek. After a year, the Germans learned to adapt to and respect Czech ways and productivity began to increase.  The number of defects fell from five per car to less than one, and production of the Favorit jumped as Skoda slowly started to move into profit. 

There was a lot of advertising in Western markets to turn Skoda's image around, admitting old flaws. For the Felicia, the first VW Skoda, the slogan was '548 changes'. The second VW Skoda production, the Octavia, was a hit.  Today Skoda Sells close to a million cars a year and the company has entered various markets worldwide. 

http://eandt.theiet.org/magazine/2009/19/evolution-of-skoda.cfm

Legends of Wheels Part V: Alan Mulally

This article is part V to the following articles

http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-isergio.html

http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-ii-carlos-ghosn.html

http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-iii-lee-iacocca.html

http://boyracer.blogspot.in/2012/05/legends-of-wheels-part-iv-siddharth-lal.html

When the Big Three from America fell due to US Dollar lending issues in 2008, The largest car company in the world termed 'too big to fail' failed. Billions of taxpayer money had to be put into GM (General Motors) to get it running again. Shareholders value was written off and 50% workforce was cut. The same was the case with Chrysler Corporation, the third largest company fresh from divorce with Daimler Benz (Mercedes-Benz) from Germany. The company too faced the same fate except Sergio Marchionne of Fiat showed interest in the company. The only company left standing was Ford Motors. This was no miracle, but smart thinking and forecasting of one man, Alan Mullaly.

Finding the Leader

In September, 2006, then-CEO of Ford Motor Company William Clay Ford Jr. took a risk. In search of his own replacement, his offers were passed up by many respected automotive leaders such as Dieter Zetsche and Carlos Ghosn, so he took the unexpected step: he hired an aeronautical engineer to lead his own company. The rest is history.

Since the last few years, the majority of news in the automotive industry has little good to print. Recalls, arbitration, dealership closings and what not. The exception has been Ford Motor Company. They seem to have cornered the market on positive automotive news with much of the credit going to the man at the top - Alan Mullaly. Ford was notorious for its caustic corporate culture. Executives put their own advancement and the success of their own departments ahead of the bottom line. The company was divided into warring fiefdoms. Different sets of data were used to make different points to different constituencies. And the automaker consistently bet big on homerun products only to let them languish after their initial success.

When Mulally was tapped as Ford CEO in the spring of 2006, reaction inside the company ranged from suspicion to outrage. What did an airplane guy know about the car business? "There were lots of raised eyebrows," recalls Bill Ford. The management team was particularly rattled, especially those who were hoping to fill the job themselves. Ford was heading for a $12.7-billion loss and on the verge of losing its No. 2 sales spot in the U.S. to Toyota because of poor management and an uninspiring vehicle lineup. Four years later, Ford reported a $6.6-billion profit — the biggest in the sector that year — and Toyota was comparing its cars with Fords, not Hondas, in its ads.

As much of the competition struggles with challenges that have followed one of the worst years in the industry's history, Ford has its eyes forward. The choices that Mulally and his team have made over the last 3 and a half years are a model for how struggling automakers and their CEOs should handle adversity and do what few in the business are expected to do today. It then is not surprising to know that various industry leaders mocked Mullaly when he joined Ford.

The beginnings

The first vehicle to see Mulally's hand was the Ford Taurus. Ford's prior designs and quality were worthy of jokes just like the GM and Chrysler. Ford's Taurus in their designers own words looked like a football. But Alan Mullaly knows the value of a brand name from his previous stint at Boeing. He asked the engineers and designers to bring back the Taurus in the coolest shape possible in a two year timeline. The company launched the famous Taurus SHO in 2009.

The early move that truly marked his understanding of business, trends, and the economy came in his first couple of months when he mortgaged all of Ford's assets for $23.6 billion. At the time it was widely criticized as desperate and he was called an alarmist when he said the money would help in both development and as “a cushion to protect for a recession or other unexpected event."

Two years later, the critics were silenced as his desperate move paid off. The 2008 recession saw the other two companies go down under bankruptcy while Ford survived without loans of any sort from the government. Ford lost $14.8 billion in 2008, the most in its 105-year history, and burned through $21.2 billion, or 61%, of its cash hoard.

 But that didn't mean Mullaly didn't plan for a bailout if necessary. The CEO's of the Big Three went to ask for loan in their private jets which met with national outcry. (http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1). The company quickly sold 5 of the 6 jets and the next meeting saw the CEO drive in a Hybrid to ask for a loan. Mulally made a promise both to his company and the American people. If Ford accepted a bailout, he would reduce his salary (currently at $2,000,000 a year) to $1. Luckily for him, his company, and the American people, they did not accept a bailout and are the last of the Detroit Big 3 who stands as an independent company not in bankruptcy.  Mulally protected product spending even as Ford cut thousands of staff and economized on everything else, down to paper clips and plant watering. 

What people Wanted

The decision to sell Jaguar and Land Rover to Tata Motors in 2007 was symbolic of the turmoil the company was going through as they received $2.3 billion, much lower than what was paid for the companies. Aston Martin was sold of to investors in the Middle East. Volvo was sold to an unknown Chinese company. Mercury was dealt the death blow and has been cleared from the showroom floors in 2011. But while many including me question the sale of the brands, the fact remains that such moves brought the company much needed liquid cash in the time of need.  Ford also sold Their stake in Mazda when the situation became more grave.

But the Mullaly had one goal - 'FORD' and he saved the name. The company also jumped the innovation bandwagon and turned out the most advanced models with technology such as FORD SYNC. The Mustang has been refreshed to take on the likes of Cheverolet Camaro and Dodge Challenger. The Fiesta Focus with Windows technology and Bluetooth  are some of the most advanced cars in the industry today.

Creating one Ford

It did not take Mulally long to realize that there was not just one Ford, but many. In addition to just plain Ford, there was Ford of Europe, Ford of Asia and a host of other divisions and subsidiaries. And there was little coordination, or even cooperation between its many parts. All the divisions churned out different cars leading to lack of economies of scale.

Mulally’s first priority was to weld these disparate regional divisions together into a single, global enterprise. By doing that, he was able to create previously unimaginable economies of scale and create a multinational automotive powerhouse. In an early meeting with reporters, Mulally was asked if he was interested in a merger. “Yes!” he exclaimed with a big grin as we all whipped open our notebooks. “We’re going to merge with ourselves.” Today the same Ford Fiesta and Focus models are sold in US, Europe, Australia and South America.

The Outcome

Consumer Reports this month recommended 70% of Ford's vehicles, vs. 19% of GM's and none of Chrysler's.

Mulally’s vision took Ford back to its roots. He came across an ad Henry Ford had taken out in the Saturday Evening Post in 1925. Ford’s vision: opening the highways for all mankind. Although Ford did not invent the automobile, he transformed it from a rich man’s toy to a utility for the everyman. Mulally believed that Ford had to return to its vision, democratizing technology and quality so everyone could afford a best-in-class car.