Not moving fast enough

“Ford’s focus in India is to introduce a meaningful and appropriate product at the most opportune time,” says Anurag Mehrotra, executive director, marketing, Ford India when he is quizzed about the Detroit-based company’s future plan. The auto major, alongside General Motors, and Volkswagen has often been criticised for being present in India for long without a great product strategy (an area where Korean and Japanese giants like Hyundai and Honda have done well).

When the Figo hatchback was launched in 2010, it kickstarted volume for the company but sales tapered later. Then, its compact SUV EcoSport was a great success after being introduced in 2013. “Recently, we celebrated sales of 200,000 units. That signifies how popular our compact SUV continues to be since its launch two years ago,” claims Mehrotra. However, competition has heated up with the launch of Hyundai’s Creta and Mahindra’s TUV 300 in that segment. “With EcoSport, they had a first mover advantage. Obviously with new launches, volume will go down,” says VG Ramakrishnan of Frost & Sullivan. However Ramakrishnan feels that SUV segment is going to see further “sub-segmentation” and that will boost sales of differentiated models.  

A booster shot for the company’s revamped product strategy was when it entered the Sub-4 meter sedan segment with the launch of Figo Aspire in August 2015. The highly competitive segment already had the likes of Maruti Dzire and Honda Amaze ruling the roost. Ford was clearly very late to the party. But surprisingly, Figo Aspire has got a good initial response. In the month of August 2015, Aspire helped Ford break into the Top-10 car sales club, a rarity for Ford. With sales of 5,176 units, it was 10^th on the list.

Puneet Gupta of IHS explains how Aspire clicked despite being very late. “The Fiesta was global and it flopped. So, they customised. Ford has now understood the pulse of the Indian customer. He needs a stylish diesel car with a good audio system and other features. Aspire has all that with competitive pricing,” he says. Gupta believes that the success of EcoSport also helped at the dealer level. “If they are confident about your product, the customer conversion rate goes up,” he adds.

Ford claims that along with localisation, it has worked on total cost of ownership. “We have been able to achieve an 85% localisation on the Aspire. Ford cars today offer a longer service interval of 10,000 kilometers vis-à-vis other automakers that recommend a 5,000-kilometer interval. These efforts along with subassembly of repairs has ensured that the running & maintenance cost of Ford cars over 100,000 kilometers is 12- 22% less than its peers,” claims Mehrotra.

Ford has an ambitious export plan as well, and is itching to get in the league of Hyundai and Nissan in terms of export volume. However, it needs to bridge its portfolio gap as it rationalises its product strategy in India. Ford has been shy in introducing new products in the past and is attempting a course correction on that front. It has replaced the old Figo but analysts want to see more on the product front. “I would like one or two new products, so that they are able to cover at least 60-80% of segments,” says Ramakrishnan. That coming through should help Ford India shed its single-model company image.