When Ferrari launched in India in May, CEO Amedeo Felisa spent the day talking about the company’s strategy, targets and the 13,000-kilometre road trip senior executives had taken through the country a couple of years ago to see if the roads (and people) were ready for the “prancing horse”. But that was for the press. The actual business was in the evening, at the dealer showroom on Janpath in the heart of Delhi. A section of the road was cordoned off to showcase the gleaming automobiles to a select few as they sipped on cocktails and sampled the hors d’oeuvres (vegetarian, in deference to the sensibilities of Ashish Chordia, whose Shreyans Group had bagged the Ferrari dealership). There were no Bollywood stars or models and, of course, no media — prospective customers made up the bulk of the carefully chosen guest list of around 150, each of whom went home with Ferrari memorabilia.
When you are selling a car that costs a couple of crores, to customers who are worth many more crores, you need to tailor your strategy carefully. Unlike their mass market cousins, super luxury car (on-road price of at least Rs 1 crore) manufacturers do not advertise heavily. Ferrari, for instance, has a global policy of not advertising at all. Instead, marketing is expected to be subtle. Rolls- Royce seems to have perfected this with its “whispers programme” in which a socialite, often an expatriate, invites a family he or she knows for a meal at a five-star hotel. The family is picked up and brought to the venue in the “host’s car”, a Rolls-Royce, and conversation at some point will be steered to the vehicle. In case the guests express sufficient interest, the host offers to put them in touch with the dealer. If they don’t, there the matter ends. Unknown to the guests, the tab for their meal is picked up by the Rolls- Royce dealer.
While this is a Rolls-Royce exclusive, a more common strategy for dealers is to host events such as dinners or exhibitions, at times in partnership with other high-end brands, to which existing and prospective customers are invited. Last month, for example, Porsche and Taj Palace, Delhi, hosted a dinner to showcase the latter’s Rs 8-lakh-a-night suite and the former’s car, to which a few clients of both brands were invited. Similarly, Navnit Motors, the authorised Rolls- Royce dealer for west and south India, tied up with a jewellery designer recently and invited close to a hundred customers and their spouses to the showroom in Mumbai, where the jewellery was displayed. Such co-branded events have the advantage of ensuring a wider pool of customers.
Amy Arora, brand head, Bentley India Bugatti India and Lamborghini India, says customers are enthusiastic about events where they get to drive their cars; so she invites customers to the showroom on a Sunday and they all then drive their marquee machines to a five-star hotel for brunch. Exclusive Motors, the authorised dealer for the three brands, foots the bill. She says customers have also been flown at the company’s expense to events like the Concours d’Elegance at Pebble Beach, California and the Goodwood Festival of Speed in UK.
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The size of the marketing event depends on the occasion — while 400 people, or even a thousand, may be invited for a launch, smaller groups are invited for more routine events. When Nigel Harwood, president and CEO of InterGlobe Established Products Private (the luxury arm of Indigo airline’s parent company, InterGlobe), which has brought hyper car Koenigsegg Agera to India, travelled to Kolkata last month, he invited all of five potential customers to join him for lunch. Small gestures are also important. So tickets to polo matches and flowers for customers’ birthdays and anniversaries are de rigueur, according to Arora, who recently arranged for free subscription to International Herald Tribune for all Exclusive Motors customers.
The marketing teams for these brands are small and it’s not unusual for the head of the dealership to be personally involved, particularly if it’s a high-profile customer. Sharad Kachalia, director of sales and marketing at Navnit Motors, says he personally met actor-turned-politician Chiranjeevi in Hyderabad when he expressed interest in a Rolls-Royce. Harwood too says he is involved in a sale unless language is a barrier. Similarly, both Chordia, who also has the dealership for Porsche and Maserati, and Exclusive Motors Managing Director Satya Bagla are themselves contact persons for customers. Marketing executives are hired for their understanding of the luxury segment and those with experience in marketing high-end lifestyle products are preferred. Arora acknowledges that there is a definite paucity of such personnel in India, one reason why she handles all the marketing herself.
The most important tool for marketers is their database. Harwood says his company has a database of 15,000 high-net-worth individuals, each of whom can spare Rs 6 crore and more to invest. Exclusive Motors has a database of around 4,000 customers and “prospects,” as they are known in marketing parlance. Personalised emails about events and new accessories are sent regularly. Contact with new customers is usually through recommendations, or when they get in touch with the company through the website or by phone. Cold calls are a strict no-no.
Walk-ins at dealerships can also translate into sales, though they tend to be enthusiasts rather than serious buyers. “Fifteen to 20 per cent of walk-ins can be considered good prospects. Actual conversion of a prospect into a sale depends on a number of factors like product availability,willingness of the prospect to wait for delivery, etc,” says Chordia. That’s why the location of the showroom, often on the premises of five-star hotels, is important. Word of mouth plays a vital role, says Kachalia. “The ultra-high networth community that buys such cars is a very small one, and they move in the same circles. So you need to be very careful to cultivate goodwill,” he says.
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Customers have the option to customise their dream machines to the smallest detail, down to the stitching on the seats. Before he bought his Ferrari 458 Italia, Raymond CMD Gautam Singhania was flown to the factory in Maranello, Italy so that he could decide the specs himself under the “Ferrari Atelier” customisation programme. The marketing team there, he says, did a great job.
Test drives could be slightly complex as the dealer need not always have the model a customer wants. Abhimanyu Rana, a restaurateur based in Delhi, says when he wanted a test drive before he bought his Porsche Cayman S, he was told it would not be possible in Delhi as that particular model was not in the showroom. Instead, a test drive was arranged during his next trip abroad (to Thailand). “Super luxury car dealers in India don’t invest enough,” feels Rana. However, a company executive argues that a model at times has 16 variants and no dealer can possibly accommodate so many cars in one showroom. And not everyone wants a test drive — Harwood says an Indian customer is buying one of his cars without even seeing it.
Another potential area of concern for customers is servicing, particularly for those in smaller cities and towns. Kachalia says in case a car outside Mumbai develops trouble, Rolls Royce-trained technicians, known as Flying Doctors, fly down from Mumbai. Porsche has a mobile assistance team which takes care of repairs and pays for your flight ticket back home (in case you don’t wish to stay with your car).
Premium cars are uniquely positioned in that the brands themselves need no introduction. And India, which has 62,000 households with an average net worth of Rs 25 crore, according to a report released last month by Kotak Wealth and Crisil, is a market with a lot of pent-up demand. So the first couple of years for these brands are smooth sailing. A case in point is Ferrari’s debut — though the dealer declined to reveal specifics about sales, a customer reportedly walked in the day the showroom opened and bought a car. One can be sure it’s not the cocktails at the launch that swung the deal.
“So far, the companies have focused on Delhi and Mumbai, which have many ultra-high-net-worth individuals and hence, are an easy sell. Subsequent growth will depend on how successfully these brands can expand beyond these markets, through increasing their network and ensuring availability of servicing facilities, how well they cater to customer sensibilities and of course, infrastructure conditions,” says Manoj Mohta, head of Crisil Research. Mohta worked on the Kotak Wealth-Crisil “Top of the Pyramid” report that analysed, among other things, the spending pattern of ultra-high-net-worth households.
Aggregate sales figures for this segment are hard to come by as many of these companies do not report numbers to the Society of Indian Automobile Manufacturers. But one can get a sense of the direction the business is heading from the figures that are available — sales of the top-end 7 series from BMW jumped from 389 in 2009-10 to 556 in 2010-11, while Rolls-Royce sold close to 85 cars in 2010. And there are no arguments about the growth potential, considering the slew of models that have recently been launched, like the Aston Martin One-77 which at Rs 20 crore is the most expensive car launched in India. “The overall car industry will see year-on-year growth of 15 per cent for the next few years and the luxury car segment will outperform this,” says Mohta.
But for all the aura surrounding the super-luxury auto segment, there is one thing its customers share with their aam aadmi brethren. “Everyone tries to bargain… this is India, after all!” says one of the marketing executives, chuckling. And yes, they even compare mileage with other cars in the same segment. Some things don’t change — even that far up the ladder.