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The Rediff Business Special/Kanchana Suggu

1999 ends, swadeshi car's race with foreign machines continues

December 30, 1998. Exactly one year back. Ratan Tata, chairman, the Tata Engineering and Locomotive Company or Telco, launches the Indica in Bombay. "We started the Indica project with a commitment to develop a car for the Indian market, a car that could be benchmarked against the world's best in terms of features, looks and performance, and offers a great value proposition. A car designed for India rather than one adapted for India. Today, that vision is becoming a reality," he says.

Afternoon of December 30, 1998: Maruti, the reigning champion in the Indian passenger car market, in a measure aimed at weaning the arclights off its potential rival and on to itself, slashes prices of its popular top-selling small car models like the Zen, Omni and the Maruti 800 by 5-12 per cent. There was never an instance of price-cuts in Maruti's history. The sensational announcement is made in Delhi hours before the Tata Indica launch in Bombay, adding a new, exciting dimension to car price wars.

January 25, 1999: The initial response from car-buyers is stunning, even overwhelming. Telco is swamped with 115,238 full payments for advance booking of the Indica against a planned sale of 10,000 vehicles in the first phase.

March 1999: "The first two days were really hectic. We had to keep our showroom open till 11 pm every day. When we offered the test drives, the response was so awesome that we had to eventually discontinue the drives," says V P Ajitkumar, general manager, Concorde Motors, a 50-50 car finance firm of Telco and Jardine International.

September 1999: Leading financial newspapers publish details of a respected survey of Indian automobile consumers. The 1999 survey on performance, styling and layout by J D Power and Associates, an international automobile survey agency, places the Indica at the bottom of the small cars segment, just above Hindustan Motors' Ambassador, "the living legend that does not deserve a second look". Maruti's basic cars, Hyundai's Santro, Daewoo's Matiz and Fiat's Uno are placed above the Indica in the market sweepstakes. The survey reveals that the Indica owners are dissatisfied with the engine and gear-box. The survey shocks Ratan Tata. "We'll take the survey as a standard. We'll take every effort to ensure that Telco's products compare favourably with that of competitors," says a top Telco official.

December 30, 1999: The Indica is refurbished but still lags behind as competitors ready to roll out new, sexier models that promise to intensify the competition. For instance, Maruti is all set to unleash the Wagon-R on the Indian roads.

The Indica, the result of a Rs 17 billion Telco project, was hyped as a swadeshi car, something very Indian, a symbol of modern, resurgent India's capabilities. In fact, the Indica, it was said, meant India's car!

So what went wrong?

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