Why right engine+gearbox+variants should be offered at launch

Am mighty pissed off with how the prospects of some otherwise-competent models are ruined, simply because the maker didn’t do its homework! The most recent example is the Tata Altroz which is quite a capable hatchback, except for that puny + weak 3-cylinder petrol under the bonnet (review link). There have been many other cars too which left customers wanting for their choice of engine or gearbox. E.g. the Compass which offered everything in 2017, save for a Diesel AT which 20-lakh customers prefer (especially important as its Petrol AT was lame). By the time the Compass Diesel AT arrived in 2019, customers had moved on. There is also the Yaris which arrived with an ordinary petrol engine & was the only C2-segment sedan without a diesel.

No one understands the thread title better than the big guys – Maruti, Hyundai & even newcomer Kia – who roll out a wide variety of options at launch itself . When the Dzire was introduced, it came with petrol MT + AT and diesel MT + AT. Heck, Hyundai has been practising this forever (take a look at the offerings on the 2015 Creta or the Venue). Kia dialed it up a notch; not only did the Seltos come with 3 engines & 6 gearboxes (including a torque-converter, DCT & CVT automatic!!!), it also offered a mind-boggling array of equipment levels. So many trim levels that, even after proof-reading our 15,000 word Seltos review, I still haven’t understood them.

One MUST strike when the iron is hot – this is only when the car is fresh in the market. I cannot think of a single car whose fortunes changed after a new engine or gearbox was introduced 2 – 3 years later. On the other hand, I can list many cars whose future was destroyed because it didn’t offer the right engine or gearbox at the time of introduction.

Below are 16 reasons why the OEM should have it all ready at the time of the model’s original launch. On the other hand, I challenge any manufacturer to give me ONE GOOD REASON for not offering the desirable engine / AT / variant at launch. In such a brutally competitive market, you can’t arrive for the battle without your sword.

• Hardly anyone from the aam junta comes back later to check if their “first choice of engine & gearbox” has become available. Once you are rejected by the customer, you are usually out of sight and out of mind. Odds are, by the time you finally launch that much-awaited engine & gearbox combo, the customer has moved on. No one has been holding their breath. Consider the Jeep Compass. All those who wanted their “magical Compass Diesel AT” have already bought their XUV500 / Creta / Tucson / Seltos / Hexa ATs. By the time the Compass Diesel AT launched, it literally had run out of customers. Why would a customer wait anyway? Not like any brand provides fixed timelines on the yet-unseen engine or gearbox. Usually, it’s an indefinite, frustrating wait. FCA India should stop building cars & write a book on “how to miss golden opportunities”, based on their 25 years of blunders in India.

The customer doesn’t come back. Customers don’t wait for 2 years.

• The original reputation sticks. It rarely ever changes. Mahindra foolishly launched the TUV300 with an under-powered motor. It was wrong on so many levels! Just 84 BHP in a 1600 kilo body-on-frame UV. The “tank” quickly built a reputation on the street for being UNDER-POWERED (sad because it was otherwise a competent UV). Mahindra realised its folly & brought out a 100 BHP version later, then a “Plus” variant powered by the delicious 2.2L mHawk. Alas, it was too late (an agonizing 3 years in this case). The improved engines did absolutely NOTHING to its sales figures. With the Altroz as well, many people will permanently associate the petrol variant as being “under-powered” (even after the turbo-petrol is launched). Mahindra had the 2.2L ready, as did Tata the Nexon’s 1.2L Turbo. To not use that ammunition when going to war was the most foolhardy decision taken by their respective managements.

The first impression is the lasting impression. You must always put your best foot forward when meeting your customer / client / life partner etc. the first time. If you goof things up, one rarely gets a second chance in either of these scenarios.

• While on this point, the Civic surely deserves the award for the WORST engine + gearbox combinations thinkable. Honda gave it a quick petrol, then mated it to a slow CVT. No petrol MT for enthusiasts or cost-conscious people either. The Civic got a 118 BHP diesel (low power rating for the segment), but not an AT which 2-million-rupee buyers love. In one stroke, Honda destroyed the fun-to-drive reputation of the Civic that was created by the 8th-gen model. It’s as if Honda’s chief competitor planned the engine + gearbox offerings!

• All comparisons with competing products are made at the time of launch. Only enthusiasts bring out their calculators after 2 years when the upgraded variant comes. If you lose out to the benchmark cars when the attention is entirely on you, that’s a major setback. How do you think the Altroz petrol compares to the erstwhile Baleno or Elite i20? Not a match in terms of refinement or performance. Ironically, many brands take a step backward with their latest too. The Captur was launched without an AT or AWD, both of which the outdated Duster had (the car it should have been replacing!). There are so many stories of potential clients comparing the Duster & Captur in the showroom, then driving out in the former. IMHO, Renault should have launched the Captur as the “new Duster”, and not a new nameplate at an unjustifiably higher price.

• Fatigue: There is a chance that, by the time you finally bring the powertrain option that’s in demand, your product is already “old news” or “yesterday’s story”. Prime example is the Beat diesel, Cruze AT or Corolla 1.4D. The introduction of these variants did almost nothing to their sales figures. Any gains were temporary. At best, they took away sales from existing variants, but didn’t really add “new customers” to the family.

• When its new is when your car has the maximum number of test-drives and people checking it out at the dealer. Almost every sub 20-lakh car debut leads to crowds at the showroom, and that’s when ALL EYES ARE ON YOU. The crowd includes not just potential customers, but also enthusiasts, opinion-makers & those with more than a passing interest in cars who are test-driving for the fun of it. Again, I reiterate = this is the time when the “reputation on the street” is built. Tata showcasing unsorted Harriers at malls & dealerships severely damaged the brand. What’s worse, a lot of that damage is permanent. The improved 2020 car wouldn’t get even 10% of those original eyeballs.

Few customers ever return to a product they once rejected. Fact. Think hard = this would apply to you too. Once rejected, your car is out of the customer’s mind. Take some more time, but do it right. Tata hurried with the Harrier because they wanted to launch before the Hector & Seltos. Did it help at all??? The car is a borderline flop. An analogy from the restaurant industry comes to mind. One expert said “if I had to wait 30 minutes for a table, I’d still come back to the restaurant if they served me excellent food. But if I ate a bad meal, I’m never coming back (even if the waiting was zero)”.

• Lower potential = Because customers generally love “fresh new cars” and the latest-is-the-greatest mentality, any engine & gearbox combination has the maximum potential only at launch. To add some numbers to that thought, if you could sell 100 Petrol ATs at the time of launch, the number will probably be more like 30 Petrol ATs if the combo came after 2 years. A fitting example is the Amaze. Honda pulled off a master-stroke with the s-m-o-o-t-h Diesel CVT combination at the time of the 2nd-gen’s launch. Sure stood out in a sea of jerky AMTs. Do you think it would have had the same impact if the Diesel CVT came, as an afterthought, in 2021?

Change yourself; do NOT expect the customer to change.

• Your advertising will only be half as effective. For instance, if you have just a diesel engine and have spent 10 crores on advertising, that 10 crores has been spent on 40% of the target market (missing the other 60% which wanted a petrol). The latter would glance through your ad, but not bother with it. Remember the Jetta? The sexy sedan came with a 2.0 diesel in 2011, but not a petrol. VW did give the car a petrol a year later, although it was a puny 1.4L. Meanwhile, Skoda went from strength to strength on the basis of its creamy 1.8L TSI. Petrol customers happily chose the Octavia / Corolla / Civic instead of the Jetta. On the flip side, Ford launched the EcoSport really well; 3 engine options, and enough variants. There was something for everyone in the EcoSport line-up. More examples of cars without good petrol engines include the relatively new Nissan Kicks & Mahindra Marazzo. In a market that had sharply moved to petrols, these two showed up empty-handed…like arriving at a birthday party without a gift in hand. Because of its surprisingly car-like driving experience, I feel that the Marazzo would’ve done better with a good petrol & a smooth Diesel AT. A friend of Vid6639 absolutely loved the Marazzo, alas he was firm on a petrol. Result = he paid up for the BR-V.

• Limited marketing budget. When originally launched, the car has 50 crores of publicity pushing it (including advertising, newspaper articles, professional reviews, TV, YouTube, vernacular media). 3 years later for a mere variant? Fat chance. Its step-motherly treatment in that way as the variant launched later will get just 10% of the marketing budget (of the original launch) and maybe, 5% of the eyeballs (as not all media will test-drive the new variant like they did the original launch). When your car is brand new, it’s newsworthy, hence every website + magazine + newspaper + TV channel will rush to cover it. A variant launched late? Yawn. Search and tell me how many people have reviewed the XUV500 Petrol AT. Heck, even media drives aren’t held for the delayed variants.

• Limited support from within the company! At the time of the original launch, the full weight of the organisation is behind the car. It has 100% focus of the top management, product team, marketing, dealerships and so on. But when you launch a variant 3 years later, other than the product guy in charge and a bored engineer, no one else has the time for it in a large organisation of 25,000 employees. The senior management is busy with other matters.

• Could also suffer from bad timing. The initial product launch is timed to perfection! Lots of research & minds are behind it. But the later engines / variants / gearboxes are released whenever they are ready (and not necessarily when the market is hot).

• Higher costs: Due to lower sales, the per-unit-cost of everything goes up. Audi launched the A6 with just a petrol (no diesel), FWD (no AWD), two variants and no big engine for enthusiasts (link). Because of the smaller volumes, Audi would have to pay a higher cost for the kits, the shipping would cost more, its advertising would be less effective / limited etc. etc. Note that this factor affects mass market models more than luxury cars as the sub-20 lakh segment is all about “efficiencies of scale”, including part sourcing costs and the massive fixed expenses of the auto industry. There is a MAJOR DIFFERENCE in the total costing of a car selling 4000 / month, versus one that does 8000 / month.

• Your own image & reputation take a beating. When you launch a product without offering the right engine / gearbox / variant, you might as well tell your boss & the competition that you haven’t done your homework. Case in point = the Altroz. What the heck was the product team thinking in bringing the car to market with that weak 1.2L petrol from the Tiago? The diametric opposite is Kia. When Kia launched the Seltos with a laundry-list of variants + powertrains, it gained instant respect in the market because of all the background work the company obviously did. From a “Korean might-be” company, the management now commands respect & fear in the industry.

• Fact = ATs are fast gaining in popularity. Not just with regular folk, but even in the enthusiast community (related poll). If you don’t offer a good AT with your big-bang launch, you just missed the mark. An MT-only car is ignoring an influential & profitable customer base. Tata Motors says they expect 50% of Harrier sales to be from the AT – (link). We can safely rephrase that to saying that Tata ignored 50% of its target market when launching the Harrier sans an AT. Even so, don’t offer a half-baked AT just for the sake of it. The XUV300 is a properly premium crossover in every sense. Post-launch, Mahindra noticed many customers walking away because of the missing slushbox. So, it put together an AMT which frankly is simply too jerky for anything other than an entry-level hatchback. Customers willingly flocked to the Venue & EcoSport instead, which offer butter-smooth ATs.

• Letting down your brand’s die-hard fans & losing your followers. There are many brand loyalists who will only buy a Maruti / Tata / Mahindra / whatever. To them, their favourite brand (or two) conquers all. Some OEMs just don’t get it though. Consider the WR-V where Honda is literally forcing Honda-loyalists to consider other cars because it won’t give the car its tasty 1.5L or an AT (surprising, being how AT-friendly Honda is as a company). There are many people who wouldn’t look beyond a Honda in that segment, yet because of the company’s stubbornly stupid decision, Honda fans have gone ahead and enriched the coffers of Ford, Maruti etc. (must-read thread). Honda is afraid that an AT WR-V will cannibalise its other cars. Well, if you don’t cannibalise yourself, someone else will gladly do it for you! One more exhibit = despite its shoddy after-sales service, brand Skoda does have a certain number of followers. Yet, many of them were forced to look at the VW Vento, because Skoda inexplicably never offered the hallowed 1.2 TSI & DSG combination in the Rapid. Why?

• The more the delays, the weaker your competitive position will be. Reason? Every year, the goalpost is moved ahead. That’s the truth and it’s called “progress”. Allow me to come back to the Compass Diesel AT. If Jeep had launched the Diesel AT in 2017 (with the main launch), its competitors would mainly be the Creta & XUV500. By the time that Jeep finally brought the variant, it had not just the Creta & XUV500, but even more contemporary competition like the Seltos, Hector (I know petrol AT, but significantly cheaper) and Harrier AT (just launched). Worse still, all these cars made the Compass look terribly overpriced.

• Needless to say, it is equally important to maintain continuity of your existing + popular engines. VAG discontinuing their all-too-important 2.0 diesel is going to deliver a body blow to their big cars. How on earth do VW & Skoda not have their bread & butter engine ready in time for BS6? Cars like the Superb, Kodiaq, Octavia, Audi As & Qs are now petrol-only-offerings in segments where buyers love oil-burners! The Endeavour too will lose a chunk of enthusiast customers who bemoan the demise of that sweet 3.2L. Maruti not having the 1.5L Diesel is going to take thousands of sales away from the brand. Just wait for the markets to open up and you’ll see. It was a rare big goofup from Maruti. A shame because their 1.5L diesel is simply amazing (review link).

P.S. Launching a top-end AT variant later is an acceptable strategy to avoid “sticker shock” at debut. Manufacturers do this to avoid showing the topmost variant’s price as too high for the market to accept. They eventually release one later. Remember, the higher the variant, the higher the profits for the brand, so they also want to come out with a fully-loaded AT.

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