New product performance in emerging markets: two cases from the Indian passenger car industry

In June 1993, the Government of India opened the automobile sector for entry to foreign auto-manufacturers. One of the first foreign entrants was Automobile Peugeot of France, which set up a joint venture in 1994 with Premier Automobiles Limited, a domestic auto assembler, to manufacture and market the Peugeot 309 in India. In the same year, an Indian truck manufacturer, TELCO, embarked on a project to manufacture and market its passenger Indica, without foreign collaboration. Though resource-constrained in several ways, the Indica was a success, while the Peugeot 309 failed. Here we research these two cases to identify the antecedents to new product success in emerging markets. The emergent model from our study suggests that new product success in emergent markets is strongly linked to market selection and product positioning, (which in turn emanate from 'sense and response capabilities') and integrative capabilities (internal and external) that are driven by strategic intent. Resource/capability gaps appear to have only a weak influence.