Cars and the consumer

Jul 20 2014, 21:52 IST
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SummaryWhy are attitudes of car owners in India different from those in the advanced automobile markets?

Consumer attitudes are not the same the world over. That is especially true for consumers in the developed world and the rest of us in Asia. Western consumers have a deeper and long-standing association with brands and consumer rights as opposed to those in, say, India. Ralph Nader became an international star in the 60s because of his fight for the rights of American consumers, in particular, concerning car companies. There lies the rub. American car owners have been bombarded by car recall announcements in 2014. General Motors announced new recalls involving 2.7 million cars and trucks sold in the US. Toyota, one of the most trusted brands in the auto industry, has recalled almost 3 million vehicles so far this year. The numbers at Ford, Chrysler, Honda and Nissan range from almost 1 million to 1.6 million. BMW recalled 1,56,000 sports sedans and sport-utility vehicles in June to fix a problem that causes stalls. Mercedes-Benz called back 2,53,000 C-Class sedans to fix a faulty electrical connection that could shut off taillights and brake lights.

Here’s the difference between American car owners and those in India. Ever since Toyota’s largest-ever recall of vehicles in the US in 2009-2010, the company has been trying to recover its brand equity and rebuild consumer trust. Based on consumer attitudes towards the Toyota brand derived from GfK MRI’s Starch Advertising Research Brand Disposition, prior to Toyota’s recall in November 2009, over three-quarters (83%) of US adults surveyed were positive about the brand while fewer than 1 in 5 (17%) were negative. This showed that the majority of consumers had tremendous confidence in the Toyota brand. Then, in November 2009, Toyota recalled 3.8 million vehicles because of floor mats that trapped accelerator pedals. Consumer attitudes towards Toyota began to change. Positive brand disposition fell five points to 78% while negative brand disposition rose five points to 22%. In January 2010, after receiving customer complaints, Toyota recalled a million more vehicles for problems with accelerator pedals sticking in cars without floor mats. Then, from February through April 2010, Toyota recalled other car models for an array of problems. Following this, Starch data showed that consumers’ positive feelings towards the Toyota brand dropped even farther—19 points to 59%. Consumers’ negative feelings rose 19 points to 41%.

Now contrast this with India, where car recalls have been on the rise and offer an insight into the behavioural patterns of

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