Why do auto giants fail in India?
Business
On September 9, 2021, Ford Motor Company announced that it was being “forced” to end manufacturing operations in India; to shut down 2 of its plants due to "huge accumulated losses and lack of growth in a difficult market".
The company has piled on more than USD 2 billion in losses over the past 10 years. With another Auto giant leaving the country, a prominent question is asked again - Why do big Auto companies fail in India?
Currently, only a few foreign players truly hold a significant market share in India.
Auto as a sector has been declining
While the decline was witnessed even before COVID-19 and was further intensified during the pandemic-led crisis, automakers have continually found it difficult to dominate the Indian market. The 28% tax on gasoline vehicles remains a major roadblock. Last year, Toyota Motor Corp announced that it would not expand in India due to this very reason.
Prices are sticky
India still remains a market for low priced cars. Maruti & Hyundai hold a significant 2/3rd of the market share due to this very reason. Maruti’s best selling ‘Alto’ remains the unbeaten horse within the 800-cc engine, thanks to its starting price range of INR 3 lakhs.
Moreover, the auto industry market is sticky. The early entry of big players makes it all the more difficult for the new ones to enter since the prices already offered to tend to hang in the market for a while.
Others to leave India
GM Motors
After CEO Mary Barra’s USD 1 billion announcements, the company announced its withdrawal of the Chevy brand as a shock to many.
Fiat
Failing to keep up with its ground from the 90s, the company was disinterested to launch new models in the country
UM Motorcycles
United Motors of America didn’t land a foot right with its poor quality and low sales, quitting the market without an actual dent
Harley Davidson
Ceasing operations last year, Harley formed a deal with Hero MotoCorp to sell parts, accessories and its own motorcycles as well in a licensing agreement.
Ford’ employees
Ford currently has close to 4200 employees, who face a risk of immediate unemployment in the next coming months. According to FADA, there are close to 170 dealers & 391 such outlets with around NR 2000 crore investments at risk, with the dealerships having close to 40,000 of their employees. As per reports, Ford India Dealers currently hold close to 1000 vehicles, amounting to a scary INR 150 crore inventory.
“We have only one demand and that is employment... There is also doubt if any of us will get employment and our demand is that we want employment… Management said they are ready to make a settlement. But the settlement is a temporary solution. Either Ford has to continue operations here or whoever is taking over this company should assure continuity.” - Suresh, Ford Workers Union President
What’s next
As reported by the company, the assembly plant in the Sanand vehicle assembly plant will be closed down by the end of 2021, while the Chennai engine and vehicle assembly plant will close its operation by mid-2022.
Ford is the fifth major foreign company to close its operations in India in the last decade. Despite India being the fifth-largest auto market by market size, with a lot of growth potential, foreign automakers leaving does not present India's consumer market in a good light to the other foreign players.
All you need to know about Apple’s iPhone 13 event
Current Affairs
On September 14, at its California streaming event, Apple launched two premium iPhone models- four new models in the iPhone 13 lineup.
The tech giant also launched a new Apple watch, and as a surprise, also announced two new iPads.
Here are the details for all the Apple enthusiasts out there:
iPhone 13 Pro
Two variants: iPhone 13 Pro Max and 13 Pro
Launched in four new colours, the Sierra Blue colour is simply stunning
Bigger batteries: 13 Pro model’s battery lasts 1.5 hours and the 13 Pro Max model lasts 2.5 hours longer than the previous iPhone 12 Pro
Camera: 3x optical zoom, ultra-wide camera and a wide-angle camera, and macro photography
Storage options: Between 128 GB and 1 TB
iPhone 13
Specs: A15 Bionic chipset, ceramic shield display
Colours: available in five colour finishes - Pink, Blue, Midnight, Starlight and Product Red
Display: New custom Apple OLED display offering "improved power efficiency", advanced displays 28% brighter than previous versions
Camera: The 12 MP main camera is now larger and lets in 50 percent more light
Storage options: between 128 GB and 1 TB
iPhones coming to India in the first wave
For the first time, the iPhones will come to India in the first wave itself. Usually, it's always been in the second wave
Pre-orders start from September 17 and sales from September 24
iPhone 13 Pro Max and 13 Pro will start at INR 1,29,900 and INR 1,19,900 respectively
The price for iPhone 13 and 13 mini starts from INR 79,900 and INR 69,900 respectively
iPad Mini
New all-screen design with an 8.3-inch Liquid Retina Display with the new A15 Bionic
New camera modules and apple pencil (Gen 2) supported
Available in two sizes: 64 GB and 256 GB
4 colour variants: pink, starlight, purple, and space gray finishes
Price starts at INR 46,900 for WiFi models and INR 60,900 for cellular models
iPad
New update to its classic 10.2-inch iPad
9th Gen iPad with Apple 13 bionic chip, with the company claiming all-day battery life retention
Storage options between 64 GB and 256 GB
Price starts at INR 30,900 for the WiFi models and INR 42,900 for the cellular models
Apple watch
The new Apple Watch Series 7 has the largest ever display and 1.7mm thin borders
Comes with watchOS 8, which was unveiled in June 2021
33% faster charging, with all-day battery life
Bundled with a magnetic fast charger USB-C cable
Price for India has not been released yet
Environment commitment
Apple has also announced an environmental commitment, saving 600 metric tonnes of plastic by no longer using plastic wrap on the outer box.
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