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Old 23rd July 2013, 13:56   #1
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Question Why is Ford's resale value poor?

I was reading the survey results LINK & am trying to figure this out. I own two ford cars an Ikon & Fiesta, both petrol. One driven for 85k km & other finishing 10k rounds. I am a satisfied owner with only average ownership concerns. Service was never too great as there were ups & downs but this car has never let me down.

So when you consider buying a car what value propositions suggests that an basic trim Alto is 1 lakh costlier to an Ikon? I never got this. Also about the resale gimmicks, this is driven purely by perception & brother, perception hasn't changed after all these autos entering Indian Market. So wont it be wonderful if someone can tell me why not Ford ?
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Old 23rd July 2013, 14:34   #2
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Default re: Why is Ford's resale value poor?

My Two paisa:

Resale value depends on various factors like
1. Segment - Higher segment cars typically see worst resale except few examples like Toyota Innova. So i dont think its fair to compare cars from two different segments
2. Cost of ownership - A small car like Alto will obviously be low on pocket and has good FE and spares and parts will obviously be cheaper
3. Demand/Popularity - historically, We Indians have been small car buyers. Things are changing fast now. For the time being, small hatchbacks like Alto/Santro command good resale
4. Service network - This is where Maruti and Hyundai score well. they have deep penetration across India and though other brands sell well in big cities, people in small cities typically opt for these cars only
5. Reliability - Good example here is Toyota. Though their service network is nowhere close to that or Maruti or hyundai, these cars are workhorses and can take abuse without breaking down.

Other than that, Even Maruti has cars such as Estilo which never sold well. so i am sure Resale value of that car will be pretty bad. What happened to Hyundai Getz ? Cars like Alto/Swift commands very good resale because it was a hit.

Coming to why not Ford, What about the Fiats and the GM ?

Apart from Figo Ford never really sold well. With Figo they are proving to consumers that Ford cars need not be very expensive to maintain. If they do the same with Eco Sport i am sure resale will improve.
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Old 23rd July 2013, 14:49   #3
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Default re: Why is Ford's resale value poor?

Ford petrols = depreciation disaster. It was the Ikon that really spoiled Ford's image in India. Ikons with 50k+ on the odo were way too costly to maintain compared to other competing models epecially the Esteem. The Fusion which was a good car ahead of its time completely bombed in the market. It was only after the Ford Fiesta (now Classic) was launched the things started looking up for Ford. Figo roped in decent sales. The success of the old Fiesta along with decent numbers for the Figo got to their heads and the overpriced new Fiesta again bombed in the market. Now its upto the EcoSport to save Ford's face. This time around they have priced it sensibly but people won't take too happily to the long waiting periods.

EDIT : Get this - A Zen commands a better resale value than an Esteem of similar vintage. This despite the fact that a brand new Esteem was costlier by atleast a lakh if not more than a Zen. It has to do with demand too. Hatchback = cheaper to own and run compared to a sedan = more demand.

Last edited by longhorn : 23rd July 2013 at 14:58.
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Old 23rd July 2013, 14:49   #4
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Default re: Why is Ford's resale value poor?

Quote:
Originally Posted by anoop.nair View Post
So when you consider buying a car what value propositions suggests that an basic trim Alto is 1 lakh costlier to an Ikon? I never got this. Also about the resale gimmicks, this is driven purely by perception & brother, perception hasn't changed after all these autos entering Indian Market. So wont it be wonderful if someone can tell me why not Ford ?
IMHO, the perception about Ford has been created partly due to it's actions when they entered into the Indian market and partly due to the perception baggage from the US. The earlier models were all past their prime and when they were launched here, the cost of the ownership was quiet high as compared to the models existing at that time. I still remember the maintenance costs of Corsa/Escorts were way higher than the corresponding Marutis or ambis. The products were launched as premiums but the look and feel was not premium at all. The durability was also not really great which has resulted in damaging the perception permanently I think. look at the new petrol auto Fiesta. One of the best technology available on street today but still there is hardly any off take. The autos are doing just fine in Indian markets as compared to this. So I guess the past sins are the ones which are resulting in the present situation. I believe Skoda is very much in such a phase of damaging the brand here at present with it's ASS reputation.
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Old 23rd July 2013, 14:56   #5
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Default re: Why is Ford's resale value poor?

The low resale value is mostly car specific and not across the board as such. A product that has decent first sale volumes is generally more accepted in the used car market since parts are easily available at not a very high price. Most used cars go through their first resale in the 3 - 5 year frame which is when the first set of electronics, suspension components, fuel pump, etc. are replaced.

There maybe exceptions but Ford Fiesta and Ikon cars perceived to comparatively less longevity. Part failures are extremely common after a period of three years and Ford's after sales service is highly inconsistent and nothing to write home about.
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Old 23rd July 2013, 15:38   #6
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Default Re: Why is Ford's resale value poor?

Witnessed this first-hand.

Sold my March 2003 Honda City Vtec for 3.5 lakhs.

My brother's late model 2005 Ford Ikon 1.6 with 20,000 lesser kms, one owner (Vtec had two), original paint (Vtec had an overcoat) and Ford dealer service history (Vtec used an independent garage) refused to move off the block. Finally went for Rs. 1.2 lakhs.
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Old 23rd July 2013, 15:50   #7
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Default Re: Why is Ford's resale value poor?

This actually is true. My swift went for 3.8lacs (4.5yrs 90k kms) whereas my brothers Safari isn't getting that much! and I don't even think that my fiesta would get that much!?!

Quote:
Originally Posted by manson View Post
There maybe exceptions but Ford Fiesta and Ikon cars perceived to comparatively less longevity. Part failures are extremely common after a period of three years and Ford's after sales service is highly inconsistent and nothing to write home about.
I differ with you on this one. Ford's after sales has been the best for me till date. Comparing it to the After sales of Maruti, Tata, Hyundai, Skoda, Mahindra. The service guys have always paid attention to the problems I might have and rectified and helped in every manner. Warranty issues never cropped up. And service costs of my fiesta have always been lower if compared to my Swift.
Though there's one thing peculiar to ford which I didn't find anywhere else. They did a suspension overhaul at 70k kms as part of scheduled maintenance, though my suspension parts would have lasted maybe another5k kms.
And above all I find ford cars to be more reliable than any other brands that I have mentioned. No niggles, nothing in my ownership.

Last edited by stormerider : 23rd July 2013 at 15:52.
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Old 23rd July 2013, 15:58   #8
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Default Re: Why is Ford's resale value poor?

Sigh. Ikon - driveability fantastic. Service costs - nightmare. Personally vouch for Ikon D. Spent a fortune maintaining it. Ikon which was bought in Josh was expensive for many.

Had to give-away, a well maintained car almost at the cost of an extremely old Omni! Heart bled, but had to.

I am happy that your Ikon P is reliable. I know a colleague who loved the car but had to spend a lot of time and money with the garage guys. It probably was one specimen of lemon for him.

Ikon made many people feel that there were conned. And bad news spreads 11 times faster than good news as they say. And perceptions in markets are not easy to change.

Had an experience with Fusion too. Loved the 'cross over' feel, a strong diesel engine - but spares, spare me the heartaches. I'd not even wish my worst enemy such experience.

My close friend took the car and after spending frightfully big sums, found some sanity in a local garage. But he vouches for the car. Sigh. Fun to have, but expensive - somewhere sounds like a 'mistress'.

Another good friend seems to be mighty happy with Figo. He does 60% highway driving, especially to various farms.

Seems that Ford could figure it out. Hope resale values of Figos are 'normal'.

As others have said earlier, Sedans, Size (inversely proportional to resale value), Service (reliability or lack of it), Service costs, Share of market all influence re-sale value. Should I say a 5S framework for resale value ?
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Old 23rd July 2013, 16:06   #9
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Default Re: Why is Ford's resale value poor?

A Car's resale value depends on its reputation and percieved goodwill.

How long does a car last in years or Kilimeters relatively trouble free.

Cost and availability of spares

The Bata ka Joota comparision theory which is unique to India and a yardstick of measurement so often across products.

Size of the car for sure as mentioned earlier.

Fuel efficiency for sure.

By reputation, the Japanese cars led by Toyota and followed by Nissan, Honda, Mitsubishi, even Mazda, Isuzu and Subaru have shown, Suzuki, which is Maruti included :

Technical superirity in terms of reliablility of engines and drive train systems
Good fuel efficiency
Low break down history
High sales volumes
Mass production hence low production cost
high sales volumes thus easy availability of spares and aftermarket spares

Another factor is that about five years of use what is the condition of the paint, body plates, chassis, interior, electricals, how has it sustained the normal wear and tear.

This is where the Japanese cars top while the American cars fail.

A five year old Toyota Camry will look much better than a Chevorlet Lumina. And if delved deeper will have had a much cheaper maintainance record.

Why this has happened - basic design and sales strategy.

An American car was designed for one owner who bought a new car every three years. Americans thought they are in the business of making cars.

The Japanese thought they are in the business of making cars but they are in the people logistics industry.

So an affordable car, low initial ownership cost, solid built, a wow driving experience, easy on gizmos but accurate functional features would win. This theory believed that a car should serve the first owner for five years and the second owner for another five and perhaps a third for three.

From day one it was a car designed for 13 years, not 3 years.

In 13 years the firm would have sold 3 cars instead of one. One to first owner, second to first owner as new car after five years, and a third in spares over 13 years.

Which business proposition is better ?

Look at a Prado and a Ford explorer. After 3 years the Prado will be shining, all rubber linings perfect, doors closing properly, ac perfect.

Look at the Ford explorer. Headlights absolutely abrazed, engine heating, electrical failures, rubber seals loose and hanging, interior sagged, suspension sqweaking.

The difference is obvious.

If a guy buys a Toyota Corolla and maintains it well. After five years he will sell it for about 50 to 55 % of itspurchase price.

In the five years his income from salary would have gone up by 10 % per annum.

If the Corolla has served him well after five years what will be the replacement car ? Will not a Camry or Landcruiser Prado GX win hands down over the competition or will it not be a Pajero which sells in most market about 10 % higher than a Camry.

This is the logic.

A Ford Ikon, Escort or Fiesta was never quite in the league of a Honda or Toyota or Nissan from day 1 in quality, technology, drive train systems, finesee, electricals, sturdiness, so obviously the resale price of a ford, Jeep, chevvy, chrysler, dodge, lincon, mercury, buick, pontiac, renault, pegueot, citroen, skoda, yugo, fiat, rover, vauxall, opel will obviously be lower.

BMW and Mercedes have maintained very high design and techical standards from day 1 so here too resale is good and there is frequent upgrade from a 3 series to 5 or 7 or from a E230 to an S 350.

In my personal case my first european car a Lancia Delta Intergale went to warranty repairs a record 14 times to the dealership Al Ghandi motors. Who can spare such time and energy.

Look at the luxury segment. Outside of USA Owners of Cadillacs, Crown Victoria, Mercury Grand Marquis, Lincon Navigators, Jaguar never really return to buy the same car again. Once bitten twice shy.

But owners of Lexus, BMW and Mercedes frequently buy a second, third, fourth same car and perhaps leave the prvious one at home as well for the Mrs.

Last edited by desertfox : 23rd July 2013 at 16:15.
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Old 23rd July 2013, 16:16   #10
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Default Re: Why is Ford's resale value poor?

Parts for the Ikon were imported. This combined with the ASC rule 'REPAIR=REPLACE' led to the perception that Ford is a high maintenance one.

Outside the ASC, it was a tough time to get a skilled mechanic(all the same reasons why FIAT is a dead horse now).

Other than that, there is nothing like you have to live with a niggle with a Ford(provided you are ready to spend at the ASC).

A few evidences of lower maintenance costs of current gen Fords:

The replacement cost of a Turbo is 13.5k(http://www.team-bhp.com/forum/offici...ml#post3184241)

Unni's thread on Fiesta, and his 1 lakh service bill: http://www.team-bhp.com/forum/long-t...ml#post3186037 (Ford Fiesta 1.4 TDCi - 100,000 kms update at 14th Service)

Last edited by ramzsys : 23rd July 2013 at 16:20.
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Old 23rd July 2013, 16:40   #11
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Red face Re: Why is Ford's resale value poor?

I particularly didnt like the statement in the link
Quote:
So if you’re in the market for a car, do take note of what the dealers say
Its these dealer who have been major hand in spreading out rumours of the bad resale value and high maintanece costs of the Ford vehicles which in my opinion is pure perception. Any one with slight knowledge of cars would not fall for such news. I have particularly seen a lot of customers who were interested in buying my Fiesta when it was on the block purely based on the car's performance. But never materialized when they contact dealers who scare them with the old nonsense of high maintance and poor resale value.

Now with most of the operations of Ford localized and good amount of service centres spread, slowly but surely this mindset will change.
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Old 23rd July 2013, 16:54   #12
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Default Re: Why is Ford's resale value poor?

I think its more to do with the market perception about Fords being expensive to maintain. It started from Ikon, Mondeo days and its still continuing to stay even after the service cost has come down considerably. The Figo service cost is 2K cheaper than the service cost of my friend's Swift!

And the Ford Petrols have a bad reputation when it comes to FE, they can make a petrohead happy but for the normal buyer it makes no sense. I was surprised when I was in the market for a petrol Fiesta again, the S has quite good resale value in the market!

I had an 2004 Ikon 1.6 SXi which had 7K on the odo when I bought it for 4.1 Lakhs in 2005, sold it with 97K on the odo in 2009 for 1.8 Lakhs. The car also met with a minor accident while it served me. It was a fair deal for me, may be I was too lucky
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Old 23rd July 2013, 17:26   #13
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Default Re: Why is Ford's resale value poor?

Ford Resale value is poor for Petrol versions and not Diesel versions. The petrol versions are poor in mileage per litre . In case of diesel Ford,the engine 1.4 litre Durotorq is proven,has good service support and hence Ford vehicles with diesel engines especially Ford Figo have decent resale value.

In fact, the purchase price of a new Diesel Ford Figo Titanium fully loaded with airbags and ABS is around a lac lesser than equivalent Maruti Zdi version. Therefore its resale value for same year make of Ford Titanium at Rs 50000 less than Zdi Maruti,means there is no difference in Ford Figo Diesel resale value as compared to Maruti or it is just marginal.

The future for resale of Petrol vehicles in India is bleak except for Hatch with 18Kms/litre fuel efficiency
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Old 23rd July 2013, 17:27   #14
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Default Re: Why is Ford's resale value poor?

It is not that just Ford cars have poor resale values. Try selling a Maruti A-star and you'll know what I mean.

And from what I've heard, Figo TDCi has decent resale value. Just 'acceptable'. Nowhere close to the Swift or even the Ritz for that matter. But things are definitely looking much more positive.
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Old 23rd July 2013, 17:36   #15
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Default Re: Why is Ford's resale value poor?

Look at a practical example.

Ford Tempo 1995 model ( 2.0 litre Auto Transmission )

Cost when new - Dhs. 38,000 ( Rs 4 lakhs )
Driven 25,000 KM sold in 1999 - Dhs. 8,000 ( Rs. 90,000 )

Toyota Corolla GLX 1995 Model Auto Transmission 1.6 Litre

Cost when new - DHs. 45,000 ( Rs. 4.9 lakhs )

Driven 44,000 KM

Sold in 1999 - Dhs. 28,000 ( Rs 3 Lakhs )
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