Company Description: Ipsos
is a client-focused organisation providing research services to clients on a
global basis. It is the only global market research company that is still
controlled and operated by market researchers.
Apart from exploring market potential and market trends, it tests
products and advertising. It helps its clients build long term relationships
with customers and also studies audiences and their perceptions of various
media.
Your company name was earlier Synovate. It’s
been taken over by Ipsos. Can you briefly tell us about this new identity and
the transition?
Yes,
the new identity is Ipsos, which is the world’s third largest research company.
The great thing about Ipsos today is that it is the only such company which is
owned and managed by researchers themselves. Our presidents are themselves
researchers. While if you look at other companies, they are essentially a part
of big conglomerates, which are not really research companies and could be into
other things also. As far as the transition is concerned, it the erstwhile
Synovate has been taken over last year and from 1st January this year; we are
under a common brand name i.e. Ipsos.
Your company is basically into automotive
research which also involves conducting clinics. Can you shed some light on
this?
Our
company is not only into automotive research, but in a lot of other areas. We
do research work in FMCG, consumer durables, etc. As far as automotive is
concerned, we do conduct clinics as you have rightly mentioned. We also do
loyalty research i.e. Customer Satisfaction Check. We also do brand-related
research like brand tracking, advertising, etc. So it encompasses the whole
area of consumer market research which any automotive company would like to do
right from stage 1 where a development of an idea is concerned to the last
stage which is related to customer satisfaction.
Is your research primarily focussed on the car
industry or does it incorporate the entire automotive industry?
It
incorporates the entire automotive industry. We do our work in cars,
two-wheelers, commercial vehicles, tractors, and whatnot. We also cater to
automotive ancillaries like the lubricants, tyres and so on.
Would you like to name a few important clients
that your company has serviced? Have they primarily been overseas companies?
As
far as our client base is concerned, it’s virtually the entire gamut of the
industry. Hero MotoCorp, Bajaj, HMSI, Maruti Suzuki, M&M, VW, Hyundai,
Ford, Skoda, Mercedes, BMW, Audi, Tata Motors (both domestic and
international), are some of the prominent clients. In lubricants we have Shell,
in tyres we have Michelin and JK.
There are a lot of new players coming into the
market. Do you see enhanced business opportunities?
Oh
yes, we definitely see enhanced business opportunities. Overall, the market
research industry itself is going through a massive growth phase. More
particularly, it is happening in the automotive domain. This is because as new
players enter, the market gets more and more competitive and they need to
understand consumers better. So that is being done and as you have rightly
mentioned the overseas players are coming in and they want to understand the
Indian consumers better. So a lot of research is happening. It really helps us
with our global alignments as Ipsos is itself a large player worldwide. So
those partnerships are also taken forward in India.
India is basically a small car market. Do you
think it has become a hub for manufacturing compact cars that caters to both
domestic and overseas markets?
Definitely!
That is the way forward and in tune with the government policy. If you see the
government policy in India, it is not biased towards domestic or overseas
players. Its focus is that India should become a manufacturing hub. A lot of
manufacturers are also focusing their plans that they are going to use India
not only to serve the domestic market but also to start exporting from here.
The exports are growing faster than the growth registered in the domestic
market. While it’s already happening in the passenger vehicle space, we expect
an explosion in exports in the two-wheeler space also.
India is seeing a boom in car retail sales which
has in turn spawned a massive service and repair industry (Carnation, OEM
service outlets etc). Does this all mean the end of the road for the
unorganised roadside repair and service shops?
I
wouldn’t say that it is the end of the road for the roadside repair and service
shops. I would say slowly they are going
to get organised. What is happening is that the amount of car volumes sold is
very large. And to service that, you need more service and repair outlets. All of these may or may not be able to get
completely serviced by what OEMs are providing currently. And non-OEM players
like Carnation are coming into the picture. This itself shows that the non-OEM
side of the business is getting organised. So this will have an impact at
various levels. There will be stiffer competition for completely unorgainsed
small roadside repair and service shops. But I believe they will continue to
exist. They may not offer high-end expert repair, but for small things they
will continue to exist as they charge less.
Comparing India and China, what are the factors
that distinguish these two car markets? Are there any lessons to be learnt from
China?
I am not an expert on the Chinese market. But one thing
you have to consider is that in the last 10 years, China has gone through a
boom phase. The size of the Chinese automotive market in the passenger vehicle
space is currently 18 million units as compared to 2 million units in
India. Having said that, we were
slightly higher two decades back. They have gone through this phase because of
the infrastructure they have created like manufacturing bases, etc. And also due to the general boom in the
Chinese economy across the board which led people to have more money. Because
of the higher disposable income, they were buying more and more cars. So China
has definitely gone way ahead of us. And it’s a controlled economy unlike ours. As we are going to see the development of the
infrastructure and other economic parameters, we will see a massive growth for
India also. The predictions for 2020 at
7-8 million units per annum are very sound. Even though we had a bit of a downturn
last year, our long-term predictions remain buoyant.
What are your views on India’s used car segment?
What would be its size in the next decade? Has the influx of organised players
benefited this segment significantly?
The Indian used car market is currently as big as the new
car market. The used car market will continue to remain high as the new car
market. But has it changed with the arrival of new players? In a certain way,
Yes! Until now, the organised used car market is very small. Most of the
industry players are looking at it as a good business opportunity. So they are
getting into it. However, the unorganised sector will continue to remain big.
Because it’s only an additional revenue stream for vehiclemaking companies and
not as large as doubling their volumes. The other factor is within the
unorgansied sector also is getting organised. These people who had 1 used car
outlet now have 5. So they are
expanding.
Lastly, the vehicle parc in India is increasing
by the day. Do you feel that the government should drastically finetune its
infrastructural bottlenecks? What about improving the public transportation
system in cities and small towns?
There is no doubt that the government needs
to invest more heavily in the infrastructure.
Going forward, it will either be a main impediment or a main boost for
the car industry. Having said that, people will still continue to buy cars. For
Indians, a car is a status symbol. It is the second biggest purchase you do
after a house. While you can’t carry your house around, you can carry your car around
to show what you are. So it will continue to be buoyant. With better
infrastructure like better roads, more CNG and fuel stations, we can go faster.
So that will continue to be a big push factor. Coming to public transportation
system, we have seen it getting improved in certain parts of India. Delhi is a
very big example. We have Delhi Metro which serves 20 lakh people in a
day. Has that pushed away car sales? No!
In other areas, will it push away car sales? No! Will it impact car sales in a
certain way? Yes, it will! The primary case study is the Delhi market, where
the cheapest or the least priced car is not selling. The biggest Metro rail
users are actually not car potential owning by population. But whoever has
started using it is going towards expensive utility vehicles, sedans, etc. So India will become a more evolved market.
Will public transportations continue to improve? We hope so. The govt has some
clear plans and JNURM is one of those which will push for better transportation
facilities across cities. Mumbai Metro should be ready by next year. Chennai
has a good system right now. Now Delhi is getting CNG buses. Bangalore is also
looking towards having the Metro. So all these will happen, but will not act as
an impediment to car sales. The other critical thing that passenger
vehiclemaking companies need to remember is not necessarily see public
transportation system as a competition. A public transportation will never be a
house-to-house vehicle or a point-to-point one. So, these vehiclemaking
companies need to perhaps retune their strategies or the vehicles or products
they are going to produce according to this need. It will be like a typical
hub-and-spoke model. For example, if you may have a vehicle which will
transport people from the metro station to their houses, then you have serviced
a specific need and can still be an ‘add-on’. Wherever, the public
transportation is good like Europe or China, car sales are still high.