What went wrong with Ford in India and who will benefit from its exit?
By IANS | Published: September 11, 2021 07:48 PM2021-09-11T19:48:05+5:302021-09-11T20:00:07+5:30
Chennai, Sep 11 A combination of factors like wrong-reading of the market/product design/positioning and huge investment in a ...
Chennai, Sep 11 A combination of factors like wrong-reading of the market/product design/positioning and huge investment in a second plant when the first plant capacity itself was not fully utilised, resulted in US auto major Ford Motor Company biting the dust in India, said industry experts.
The exit of Ford will benefit companies who are in the utility vehicle space, they added.
At a time when Asian car makers have captured the market in the US, it was nothing but natural for the American automobile companies General Motors and now Ford to sputter and stop in India if they get their basics wrong.
Ford India Private Ltd recently announced that it will wind down vehicle assembly in Sanand plant in Gujarat by the fourth quarter of 2021 and vehicle and engine manufacturing unit in Chennai by the second quarter of 2022.
"Simply put, Ford did not read the Indian market correctly. In the late nineties and later small cars dominated the market. Maruti was ruling the roost and Hyundai Motor came and launched its Santro and captured a sizeable market," an automobile industry expert told preferring anonymity.
He also said Ford did not fully customise its car platforms. India is a right hand drive market whereas in the US it is left hand drive.
"Some of the Ford India's car models, the owner-driver, had to get down, go around the vehicle, open the left side door to unlock the boot, certainly a tedious affair," the expert pointed out.
"Different factors at different points of time played against Ford India and affected the company cumulatively. The three factors - product, pricing and positioning were improved over the years. With Ford facing trouble globally it has to cut down its losses," another industry official not wanting to be named told .
For a long time, the small car segment was the sweet spot for car makers in India.
Maruti Suzuki India Ltd and Hyundai Motor India Ltd cashed in on launching new models at different price points.
But Ford and General Motors failed to do so as they didn't have a small car in their global portfolio.
"Their initial attitude towards the Indian market was something like this - you ate the pizza and burger that were launched. So, drive the model we offer. But the pizza and burger companies Indianised their products while the American car makers didn't do that," the expert said.
Ford's American officials were confused when the media asked about the vehicle's mileage per litre as they were focussed on engine power. Ford looked at the Indian market through the US prism, recalled a journalist.
Ford has been operating in India for over 20 years now. The company came in as a 50:50 joint venture partner with Mahindra & Mahindra Ltd and later increased its stakes.
The first car that was launched was the Ford Escort, with an idea of having a product on the Indian roads rather than spending time designing one for the Indian market.
Later Ford India set up its plant near Chennai with the Tamil Nadu government offering attractive tax incentives like sales tax deferral for some years.
The first car that was rolled out of the Chennai plant was Ford Ikon.
Since then, Ford India has been largely an 'one model' company, that is, only one model will log higher sales.
Meanwhile, the Asian players like Maruti Suzuki and Hyundai Motor launched new models.
Ford India later added models like Figo, Fusion, Aspire, EcoSport, Endeavour and Freestyle.
"Though the number of vehicles sold in India rose manifold over the years, the company has not been successful in gaining much market share in the passenger vehicles
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editorOpen in app