Ford has once again banked on the alphabet ‘F’ – this time they call it Figo. But will the Figo brand really be a game-changer for this Detroit giant in India?
Evidently, Figo will have to work pretty hard to achieve that success. Ford had entered India in 1995 with its globally acclaimed Ford Escort. But as a whole, significant volumes have been absent for Ford in India in its 15-year-long journey. Escort, Mondeo, Fusion, though having a great brand recall, failed to an extent in making a clear purchase impact in the minds of Indian consumers. Ford did stock acclaim with brands like Ikon and Fiesta, but high volumes has been a rarity than a regularity for this American automaker. That said, the company has been able to make a significant impact in the SUV category with its Endeavour brand; but the brand’s smooth run too now is under threat with Toyota’s Fortuner entering the market.
The turnaround that Alan Mulally has crafted for this automaker in US is truly overwhelming, but, in India, Ford still roughly holds only a 2-3% market share. The company sold 29,499 vehicles in 2009 (28,563 in 2008) registering a sales growth of 3% on the Indian turf, which is way below the levels that the market leader Maruti Suzuki or the chaebol Hyundai enjoys in the Indian market. “We haven’t been able to clock high volumes simply because of the fact that we weren’t present in the segment where 70% of the cars are sold in India (read: small-car segment). But with the launch of Figo, we expect to grow rapidly in the Indian market,” says Boneham.
There is credible weight in his argument. In fact, Ford has already invested $500 million to double the annual capacity of its Chennai plant to 200,000 vehicles and is also setting up a facility to make 250,000 engines annually primarily for the high demand that Figo is expected to bring in for this Detroit giant. While Ford has no plans to bring the famous F-Series to India in the near future, Boneham doesn’t completely rules out the possibility of its launch in the long run. “Currently, our focus is on the launch of Figo and ensuring that it is a success in the Indian market. We will launch the F-Series when we believe that the Indian market is ready for such a product.”
Though a considerable lot of what will happen in India for Ford will depend on the pricing and the marketing strategy that the brand pursues in the short run, what would be key learning for Ford – and for Boneham – would be that the reason Maruti Suzuki has succeeded over the years has not been just because of introducing new brands, but because of their clever play between quality of products offered, service support provided, and market grabbing pricing. Not to forget that the legacy of the ‘Indianness’ of the name of Maruti would remain an extremely crucial factor for Ford, one no other auto manufacturer has been able to replicate.
Till that happens, Ford would have to target a hope that Figo provides it leverage to consolidate market shares in the future, rather than attempting to grab market leadership. And of course, then we have the F-Series... but then again, that’s altogether another story!
Evidently, Figo will have to work pretty hard to achieve that success. Ford had entered India in 1995 with its globally acclaimed Ford Escort. But as a whole, significant volumes have been absent for Ford in India in its 15-year-long journey. Escort, Mondeo, Fusion, though having a great brand recall, failed to an extent in making a clear purchase impact in the minds of Indian consumers. Ford did stock acclaim with brands like Ikon and Fiesta, but high volumes has been a rarity than a regularity for this American automaker. That said, the company has been able to make a significant impact in the SUV category with its Endeavour brand; but the brand’s smooth run too now is under threat with Toyota’s Fortuner entering the market.
The turnaround that Alan Mulally has crafted for this automaker in US is truly overwhelming, but, in India, Ford still roughly holds only a 2-3% market share. The company sold 29,499 vehicles in 2009 (28,563 in 2008) registering a sales growth of 3% on the Indian turf, which is way below the levels that the market leader Maruti Suzuki or the chaebol Hyundai enjoys in the Indian market. “We haven’t been able to clock high volumes simply because of the fact that we weren’t present in the segment where 70% of the cars are sold in India (read: small-car segment). But with the launch of Figo, we expect to grow rapidly in the Indian market,” says Boneham.
There is credible weight in his argument. In fact, Ford has already invested $500 million to double the annual capacity of its Chennai plant to 200,000 vehicles and is also setting up a facility to make 250,000 engines annually primarily for the high demand that Figo is expected to bring in for this Detroit giant. While Ford has no plans to bring the famous F-Series to India in the near future, Boneham doesn’t completely rules out the possibility of its launch in the long run. “Currently, our focus is on the launch of Figo and ensuring that it is a success in the Indian market. We will launch the F-Series when we believe that the Indian market is ready for such a product.”
Though a considerable lot of what will happen in India for Ford will depend on the pricing and the marketing strategy that the brand pursues in the short run, what would be key learning for Ford – and for Boneham – would be that the reason Maruti Suzuki has succeeded over the years has not been just because of introducing new brands, but because of their clever play between quality of products offered, service support provided, and market grabbing pricing. Not to forget that the legacy of the ‘Indianness’ of the name of Maruti would remain an extremely crucial factor for Ford, one no other auto manufacturer has been able to replicate.
Till that happens, Ford would have to target a hope that Figo provides it leverage to consolidate market shares in the future, rather than attempting to grab market leadership. And of course, then we have the F-Series... but then again, that’s altogether another story!
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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