With over 1.3 Billion people, India is the second most populated country in the world and when there are so many people, almost everything is larger than life here. So naturally, it is not a surprise that India is the fifth largest automobile market in the world in terms of sales. Brands like Maruti Suzuki, Hyundai, Tata Motors are already a hit in this country and are making heads turns of their customers with their amazing automobiles.
While some brands experience immense success in the country, some of them got exposed to failure as well. In this industry, some automakers failed to make a place in the fifth-largest automobile market in the world. This article will talk about all those automakers that failed to set their foot in India and the reason behind it. So without any further ado, let’s get started.
“Car designers are just going to have to come up with an automobile that outlasts the payments.”
Why Automakers are Struggling to Succeed in India?
Two brands that can set their name on the top automakers’ list with their powerful performance in the country are Honda and Hyundai. It wouldn’t be wrong to say that they are ruling the Indian market.
On the other hand, there are some of the automakers who are struggling in our country to lay their foundation. Some of the reasons for this are listed down below:
Increasing fuel price is said to be one reason.
It is also revealed that some concessional GST rate was not allowed by the Government.
One of the reasons is also the higher road taxes.
India is a price-sensitive market and people mostly focus on small cars here, for their needs. A company has to be very precise about this.
Planning of the products by the automakers was poor and naturally, they were not able to adapt to the market.
Another reason is some of the companies are not able to judge the growth of India’s automobile market.
India is a country where a single company dominates more than a quarter of its sales. Maruti Suzuki and Hyundai are the top two companies that dominate the automobile industry. There are some global known brands who failed to set their foot in India and we are here to discuss them.
Harley Davidson
Harley Davidson
The legendary American Cruiser bike was not able to set up its brand in the Indian market. It is said that in 10 years, Harley Davidson was able to sell a little more than 27,000 units in the country. While its competitor Royal Enfield sells double the number of bikes every month. Some of the reason for this is down below:
Not the Right Market
India is a country that is considered one of the biggest two-wheeler markets in the world, but it is not a market for big bikes. In India, over 90% of two-wheelers are small motorcycles and scooters as they are easy to maintain as well.
Expensive Offerings
Another vital reason has to be the price; the most affordable bike from this brand costs somewhat 4.7 Lakh. That kind of pricing is extremely high for the people living in a country like India.
Tough Competitors
Royal Enfield proved to be a better companion for the Indian customers over Harley Davidson, in terms of price, lighter in weight, and easier to maintain.
High Repair Cost
India’s roads are somehow filled with potholes and Harley Davidson bikes are quite expensive to repair if it is damaged by potholes.
General Motors
Chevrolet by General Motors
This American multinational automotive manufacturing company is considered as one of the best and biggest manufacturers in the country but unfortunately, it was not able to establish its power in India. When General Motors first came to India, it was able to sell quite a decent number of cars but with time, the average popularity started declining. So, General Motors 2017 decided to close its operation in India. Some of the reasons that it failed in India are:
Failed Business Strategy
The management of a company is one of the most important factors for its survival. As per reports, decisions regarding the company took a lot of time which resulted in not being able to reach a proper strategy for the business at a time.
Weak Dealership Networks
The dealership networks of General Motors were quite weak. The customers’ main issue was with the dealerships as they were not that confident regarding the products of GM.
Bad Resale Value
GM launched over 20 different models in 20 years and also withdrew 10 of them. Naturally, the change of the model lineup affected the resale value badly, and the customer service was also not up to the mark.
Fierce Competitors
General Motors’ technology was not that modern. Reports said that there are cars that barely pass the emission tests. Other brands focused on updating the technology of their car and were quite fierce competitors for GM.
Failed to Attract the Right Audience
GM never introduced top models that are famous in other countries in India. Naturally, it was not able to attract the attention of people in India.
Ford
Ford
Probably one of the biggest shocks the Indian automobile market got when Ford decided to stop making cars in India. The products were well made and were affordable to buy as well. Still, it failed to crack the Indian market, and the reasons are down below:
Sudden Rise in the Price Factor
The sudden rise in the price factor of Ford is one of the reasons, the company lost its place in the Indian market, the maintenance cost started rising of the new models. This high ownership cost became a problem for the customers; which also resulted in decreased sales.
Not Concentrated on the Right Models
Ford didn’t concentrate on SUV when it started getting momentum. Thus it misses out on a great opportunity to use the model to encourage the brand in the Indian market.
Wrong Investment Decisions
The cost structure is another problem, Ford invested where it was not needed, for example, they invested in world-class factories. It was not able to meet the expectations of its potential customers.
Lack of Proper Marketing
Ford slugged in making its brand big in India, while other brands like Hyundai worked 24/7. This is one of the reasons, plus the aggression that was needed for marketing, was missing in Ford’s startegy.
The Automobile market in India is a huge one, one needs to concentrate on various structures to make their brand a successful one in the country. The automakers that failed in this country are a big lesson for those automakers that wanted to make the 5th largest automobile market a hub for their brand.
FAQs
Which Indian car companies are closing?
Ford, General Motors, Fiat, and Harley had exited the Indian automotive market.
Which car company stopped making cars in India?
Ford India closed its operation in 2021 due to huge mounting losses.
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Rolls-Royce is a name that has always gone with luxury. In fact, Rolls-Royce can be used as a term to define luxury. Rolls-Royce refers to Cars, this is what we’ve known so far. But they are more than what we know.
Rolls-Royce is an engineering company that manufactures Aero-engines and power systems for civil, defence and various other industries. It aims at creating power systems for the future that prove to be the safest and cleanest. On the other hand, Rolls-Royce cars are manufactured independently by the company called Rolls-Royce Motor Cars Limited, which is now a subsidiary of BMW.
The company has more than a century-long history dating back to 1904. Started as a car manufacturer, then was forced into the defence industry during the world war for making aero-engines, facing a financial collapse in the 1970s thus resulting in government take-over, various mergers, demergers and acquisitions which led them through a lot of ups and downs. Their journey is nothing short of excitement.
Rolls-Royce – Company Highlights
Company Name
Rolls-Royce
Headquarters
London, England, United Kingdom
Industry
Airspace, Defense, Automotive
Founders
Charles Rolls, Henry Royce
Founded
1904 (Partnership), 1906 (Company)
CEO
Warren East (Rolls-Royce), Torsten Müller-Ötvös (Rolls-Royce Motor Cars)
Parent Organisation
Rolls-Royce Holdings plc (Rolls-Royce), BMW (Rolls-Royce Motor Cars)
Rolls-Royce formally referred to as Rolls-Royce plc, is a company involved in manufacturing propulsion engines for civil and defence services and power systems for oil/gas and other marine industries. Charles Rolls and Henry Royce initially established the company for making cars. But during the First World War in 1914, the government forced them to manufacture Aero-engines for military activities.
They kept manufacturing cars between 1906 and 1973 but concentrated more on expanding their aerospace sector. Rolls-Royce builds engines for civil and defence aircraft, power systems for land and naval military vehicles including submarines. They also provide power solutions to the oil/gas industry and marine activities. In simple terms, Rolls-Royce is into innovating advanced solutions for meeting our planet’s power needs. Rolls-Royce is technically a subsidiary of Rolls-Royce Holdings plc since 2011.
Since 1973, after its demerger from the core company, the Rolls-Royce automotive sector went through a number of changes in ownership. Currently, Rolls-Royce cars are manufactured exclusively by the company Rolls-Royce Motor Cars Limited, which is a subsidiary of BMW.
Rolls-Royce – Latest News
November 8, 2021 – The United Kingdom Space Agency has joined hands with Rolls-Royce to explore the use of nuclear power in space travel. This may help them cut the space journey time and cost.
May 28, 2021 – Rolls-Royce Motor Cars has launched a new luxury model ‘Boat Tail’ priced around $28 million. It allows you to customize not only the interiors but also the body shape of the car.
Rolls-Royce – Founders and Team
Rolls-Royce Founder – Charles Rolls
Charles Stewart Rolls and Sir Frederick Henry Royce are the co-founders of Rolls-Royce. Charles Rolls (1877 – 1910) was a motoring and aviation pioneer who graduated from Cambridge in 1898. Henry Royce (1863 – 1933) was a popular design engineer for car and aeroplane engines.
Henry Royce – Rolls-Royce Founder
In 1904, they both co-founded Rolls-Royce along with Claude Goodman Johnson, who was the founding Managing Director of the company after its incorporation in 1906. Their passion for cars and engineering expertise fuelled the company’s growth all through the years.
Rolls-Royce – Startup Story
The seed for Rolls-Royce was planted in 1884 when Henry Royce started a mechanical and electrical business in Manchester. In the beginning, he was making dynamos and cranes. Later, he acknowledged the market potential of the car industry in the future and started working on it.
On the other hand, Charles Rolls graduated from Cambridge and got himself employed in various companies. But he was keen on marketing and motoring, thus started importing and selling cars.
In 1904, Royce was designing and manufacturing a car of his own and that is when Rolls happened to meet him at an Automobile Club. He was impressed by Royce’s design and agreed to sell all the cars that Royce would make. Thus on 23rd December 1904, at the Paris Motor Show, the brand Rolls-Royce was introduced by displaying their first car Rolls-Royce 10 hp.
It was initially started as a partnership in 1904. Then in 1906, Rolls-Royce was converted into a Private Limited Company and was further transformed into a Public Listed Company the subsequent year. After the death of Charles Rolls in 1910, Henry Royce and Claude Johnson took the company forward. They kept introducing new car models and by 1914, Rolls-Royce started manufacturing civil and defence aircraft engines too and made it a huge success.
Rolls-Royce’s mission is to provide “Better Power for a Changing World”. They aim at improving their standards and performances to provide competitive and clean energy for the future. Rolls-Royce also marches with a vision of Net Zero Carbon in all their endeavours to meet the present and future power needs, while also protecting our society.
Rolls-Royce – Name and Logo
Rolls-Royce Logo
The brand name Rolls-Royce was derived after the founders Charles Rolls and Henry Royce. The company’s name is always used with a hyphen in between, which emphasizes the friendly association between founders.
The logo of Rolls-Royce plc comes in the blue background where two ‘R’s are embedded closely to each other in the middle with Rolls on the top and Royce below. Rolls-Royce Motor Cars Ltd has a similar logo with a white background.
Rolls-Royce’s “Spirit of Ecstacy” emblem is highly admired by many. It resembles a woman leaning forward, with her hands stretched back. Her clothes billow from the back of her neck to her hands which look like wings. The Spirit of Ecstasy, also known as Eleanor or Flying Lady, was designed by Charles Robinson Sykes.
Rolls-Royce’s business model focuses on reducing the costs of its power systems. This helps them utilize funds to invent and innovate techniques that help them move closer to achieving their mission and vision. They generate revenue by selling engines and other power systems to various industries. Also, a part of the income flows through service contracts from airlines for maintaining the aircraft engines.
Rolls-Royce Motor Cars Ltd sells premium luxury cars with high standard and customized features to its customers. Their cars are priced ranging from ₹5 crores to ₹10 crores with Rolls-Royce Phantom topping the price table. Rolls-Royce recently introduced a model named ‘Boat Tail’ for its highly exclusive customers, which is priced at a whopping ₹202 crores.
Rolls-Royce – Challenges Faced
In 1971, Rolls-Royce declared Bankruptcy due to the losses suffered by mismanagement. Their fixed-price contract for manufacturing airlines engines with Lockheed Aircraft Corporation became the reason for their fall. This long-term contract made their losses unbearable. Rolls-Royce’s fall impacted various other industries, and as a result, the government stepped over the issue and nationalized the company. The government’s hold continued till 1987, after which it was again converted into a Private Limited Company.
The next big challenge faced by Rolls-Royce was during the Covid-19 pandemic. The reason stated was, 50% of their revenue comes from aerospace activities which were completely halted due to the crisis. The company reported a loss of around £4 Billion in 2020 which was the biggest loss reported in Rolls-Royce’s history.
Rolls-Royce has so far raised around $266 Million in 2 rounds. Their latest funding was through the Post-IPO Equity round for developing Small Modular Reactors (SMR).
Date
Round
Amount
Investor Name
November 9, 2021
Post-IPO Equity
£195 Million
BNF Resources, Exelon Generation Company
January 21, 2021
Convertible Note
$1 Million
United States Navy
Rolls-Royce – Mergers and Acquisitions
Rolls-Royce Motors demerged from Rolls-Royce (1971) Ltd., in 1973. It operated independently of its parent company along with Bentley Motors until 1980, when Vickers plc acquired this car business. Later in 1998, the Rolls-Royce motors were sold to Volkswagen Groupby Vickersbut the rights for using the name “Rolls-Royce” and the logo were purchased by BMW for £40 Million. From 2003, BMW got the sole right to name, manufacture and sell Rolls-Royce cars.
Roll-Royce plc was brought under Rolls-Royce Holdings plc as a subsidiary after the latter was incorporated in 2011. But all the major and principal operations are carried out by Rolls-Royce plc. The following are some of the top acquisitions and subsidiaries of Rolls-Royce Holdings plc:
Name of the Company
Year of Acquisition/Incorporation
January 14, 2020
QINOUS
March 30, 2015
R.O.V. Technologies
2014
Rolls-Royce Controls and Data Services
2014
Rolls-Royce Power Systems
July 2, 2013
SmartMotor
May 1, 2013
Hyper-Therm High-Temperature Composites
January 8, 2013
PKMJ Technical Services
May 23, 2011
Rolls- Royce plc
September 2, 2011
R. Brooks Associates
January 28, 2010
Europea Microfusioni Aerospaziali
January 6, 2010
ODIM
July 8, 2008
Scandinavian Electric Holding
1995
Rolls-Royce North America (earlier Allison Engine Company)
1998
Rolls-Royce AB (as a part of Vickers acquisition)
1999
Rolls-Royce Marine Power Operations
1998
Vinters Limited (as a part of Vickers acquisition)
Since the car division was demerged in 1973 and later acquired by BMW, it has seen significant growth in its sales over the years. They’ve even made a record sale in their history by selling more than 5000 cars in 2019. Here is the growth record of Rolls-Royce Motor Cars since 2007, according to Statista:
Year
Sales in Units
2007
1010
2008
1212
2009
1002
2010
2711
2011
3538
2012
3575
2013
3630
2014
4063
2015
3785
2016
4037
2017
3438
2018
4194
2019
5100
2020
3756
On the other hand, Rolls-Royce plc maintained their revenue with little ups and downs from 2016-19 but faced a pitfall of 28% due to pandemic in 2020. Here is their revenue chart for the past five years:
Year
Revenue
2016
£14.96 Billion
2017
£14.75 Billion
2018
£15.73 Billion
2019
£16.59 Billion
2020
£11.82 Billion
Rolls-Royce – Competitors
Though Rolls-Royce Holdings plc has a powerful brand identity, they have tough competitors in the market. Here is a couple of them:
General Electric – General Electric along with its partners leads the aero-engine market occupying 55% of the market share and holds the 1st position. GE is also involved in various high-tech industrial activities like power systems, aviation, renewable energy, and the digital industry.
Pratt & Whitney – Pratt & Whitney is another major competitor for Rolls-Royce in the aero-engine market. They also compete with Rolls-Royce in the manufacture of power turbines for marine and other industrial services.
When it comes to cars, Some of the top competitors for Rolls-Royce Motor Cars Ltd. are:
Rolls-Royce invests huge money in inventing technologies for efficiently meeting our world’s power needs. Their innovations are awe-inspiring which reduces cost for the customers as well as protects our environment.
Electic Planes – Rolls-Royce aims at electrifying the aviation sector. Their first all-electric plane made its maiden flight on 18th September 2021. This aircraft is further being enhanced to achieve a speed of 300 mph. In the view of combating climate change, Rolls-Royce is into developing zero-emission aircraft for the future.
Small Modular Reactors (SMR) – Rolls-Royce SMR Ltd was created to build power plants that generate electricity using SMR to meet the future power needs of the UK. This technology is expected to be available by 2030.
Space Exploration – Rolls-Royce is innovating nuclear technologies to develop power systems for space launch. Net Zero Carbon – Rolls-Royce put forth Net Zero Carbon as their major goal in all their present and futuristic development. They target to bring the carbon level to zero in their operations by 2030.
Rolls-Royce – FAQs
What does Rolls-Royce do?
Rolls-Royce is an engineering company that manufactures Aero-engines and power systems for civil, defence, and various other industries.
Is Rolls-Royce owned by BMW?
Rolls-Royce Motor Cars Ltd alone is owned by BMW since 2003. It is a separate entity from that of Rolls-Royce plc which is involved in the manufacture of aero-engines and power systems.
Who are the founders of Rolls-Royce?
Charles Rolls and Henry Royce started Rolls-Royce in 1904 as a partnership and incorporated as a Private Ltd Company in 1906.
Which is the costliest Rolls-Royce car?
The company’s latest introduction of ‘Boat Tail’ is the costliest Rolls-Royce model. Its price is estimated at around ₹202 crores and is made only for a few exclusive customers.
Lakshya Singh
