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Old 2nd December 2014, 10:33   #1
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Default Ford: Exports higher than Indian sales

Ford India joins a tiny club of Indian manufacturers whose exports are higher than domestic sales. There's no better indicator of poor local strategy.

In all, the company sold 12,762 cars in November 2014. Local sales stood at 5,661 units, compared to 7,909 at the same time in 2013. On the other hand, exports went up to 7,101 vehicles (November 2013 = 4,141).

Ford's problem is that it's usually a one trick pony. Right now, it's the EcoSport garnering a majority of local sales. Prior to that, it was the Figo. The new Fiesta sedan - which had the potential to do better - never quite recovered from its overpriced launch debacle.

Ford needs an aggressive product onslaught to increase its market share in India. The new Figo hatchback and compact sedan, which are expected in mid-2015, would be a good start. But the company should prepare better. Low production capacity have hampered the it's ability to deliver cars on time and it took a while before Ford could handle the EcoSport's terrific market response. Frequent price hikes and feature deletions didn't help either.

In the case of mass market cars, where the competition is fierce, Ford will have to learn that customers can't be kept waiting.
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Old 2nd December 2014, 11:35   #2
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Default Re: Ford: Exports higher than Indian sales

No fault of Ford. With Indian customers happy with what Maruti and Hyundai are dishing out, the kind of cars that Ford produces does not find enough takers.

But it is heartening that Ford has so far resisted the temptation of becoming yet another Maruti.

Heard this quote in the morning: "The trouble with the rat race is that even if you win, you're still a rat".

So it is better for us that Ford stays away from the race.
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Old 2nd December 2014, 11:44   #3
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Default Re: Ford: Exports higher than Indian sales

They have a good opportunity in pricing the new Endeavour 'correctly' and picking off potential Fortuner customers.
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Old 2nd December 2014, 12:43   #4
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Default Re: Ford: Exports higher than Indian sales

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Originally Posted by itwasntme View Post
They have a good opportunity in pricing the new Endeavour 'correctly' and picking off potential Fortuner customers.
The problem is once a car is declared NOT GOOD, it never recovers from that tag. It always remain the same no matter what effort goes in making it better (Endeavour, New Fiesta, Xylo, SX4 to name a few). Only option left is to coin a new name.

As Aditya mentioned Ford always have one blockbuster model at any point of time. This wont help them in long term at least in local market. I see this export trend will only increase in the near future.
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Old 2nd December 2014, 13:17   #5
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Default Re: Ford: Exports higher than Indian sales

Ford has multiple problems in my opinion. They are a one-trick pony for sure. At any point in time they have never had more than 1 model hitting the deck. And there too their strategies are mind boggling. They somehow never realized that people can see through a lot of bluster than they give them credit for.

When the going was good for ecosport they kept throttling the local market and kept exporting. Today they have barely much options left. Even then if you ask for a petrol automatic (top end) the swagger is back with the dealers who are otherwise keen to quickly close a deal. Immediately they will tell you about the greatness of the automatic and how the demand is so high that they can't promise by when you will get the delivery!

Their pricing strategies are also mind boggling. I was recently looking at buying an ecosport. The top end diesel ends up costing more than 1.2 million rupees on the road. I was dumbstruck. A car which is in the end a hatchback sized thing on stilts and no such path breaking features costs 1.2 million?!! That too without any pathbreaking features. In fact some of the regular ones like EBD, Hill Assist, auto mirrors etc available in bigger but cheaper cars are also missing. Worse still, when everyone else is willing to give out discounts for the year end they refuse to even give you a rubber mat with the car!

The pricing earlier killed the new Fiesta sedan anyhow. Unless Ford realizes that playing pricey yields little in a competitive market they will remain at a disadvantage. The need of the hour is to compete on equal terms if you are a mass market brand.

Last edited by Zappo : 2nd December 2014 at 13:19.
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Old 2nd December 2014, 13:31   #6
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Default Re: Ford: Exports higher than Indian sales

Quote:
Originally Posted by civic-sense View Post
No fault of Ford.
Actually, I can find a lot of fault with Ford.

A company that sells mere 5,600 units after spending 17 years in the country needs to overhaul its strategy. I'm guessing Ford is here to do business locally, not merely contract manufacture for other countries.

- EcoSport: Despite shouting it out from the rooftops that there will be no wait periods (MD made this statement on record), we all know what happened. Sure, demand exceeding supply is understandable & a good thing for the manufacturer. However, continuously increasing the price and deleting features while customers are waiting was . This greatly damaged the brand.

- The new Fiesta is a competent sedan. Overoptimistic pricing at the start killed it. Then, that amazing dual-clutch AT isn't really being made at the factory (at a time when ATs are gaining in popularity) and there's no petrol either (at a time when petrols are gaining in popularity). It's as if Ford stops offering something the minute the market wants it

- The Figo looked dated at the time of its launch. 5 years later, it is awfully long in the tooth. Where is the more contemporary replacement? In this same time period, Hyundai has launched the Eon, i10 Grand, Elite i20 and more.

- The same Endeavour has been on sale since a decade now. No, facelifts & engine changes don't make the cut. The new Endeavour is 5 years too late.

- Fiesta Classic: What is this outdated, cramped, underpowered (diesel) sedan still doing on sale?
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Old 2nd December 2014, 14:11   #7
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Default Re: Ford: Exports higher than Indian sales

Quote:
Originally Posted by civic-sense View Post
No fault of Ford. With Indian customers happy with what Maruti and Hyundai are dishing out, the kind of cars that Ford produces does not find enough takers.

But it is heartening that Ford has so far resisted the temptation of becoming yet another Maruti.

Heard this quote in the morning: "The trouble with the rat race is that even if you win, you're still a rat".

So it is better for us that Ford stays away from the race.
Agreed with you Civic.
But then, it is also a way of hiding behind your failures.

Ford cars are superlative in driving pleasure. They could or rather should have capitalized on that good will and image and carried forward.

What it did on the launch of Eco sport was to shun and antagonize the very patrons who came in hordes to have a look, feel and eventually buy their product.

Now, as you have currently said, they are a one trick company.
Competition is always improvising.

New launches and any small shift in the view point the general public sees a mini SUV could mean a deathly silence in Ford India- A silence that could be heard all the way to the US!!

It is a flawed strategy and rat or no rat, a company needs the funds infusion to at least have the OPEX to perform.

Sadly, Ford may not be the "rat" but then it may just perish as an ant in the near future!!
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Old 2nd December 2014, 20:11   #8
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Default Re: Ford: Exports higher than Indian sales

Quote:
Originally Posted by civic-sense View Post
No fault of Ford. With Indian customers happy with what Maruti and Hyundai are dishing out, the kind of cars that Ford produces does not find enough takers.

But it is heartening that Ford has so far resisted the temptation of becoming yet another Maruti.

So it is better for us that Ford stays away from the race.
Not really, you can find quite a few faults with the way they operate, especially considering the fact that they are one of the early entrants into the Indian market. The wrong steps are now becoming more of a habit than exception. A few points which come to my mind:
  • Each product launch painfully long Ė from announcement to actual launch. With Ecosport, after the agonizing launch when it was launched, they prioritized exports, with a total disregard to the local market. Now even the new Endeavor. I feel that they may take another year or so to launch it in Indian market.
  • Even though the Fiesta bombed at launch, they had a chance to resurrect it with the facelift. Alas, the new version comes only in diesel, and even those low numbers they are not able to deliver. I can understand if the Mondeo is a low volume halo product, but the Fiesta?
  • They have a vast product portfolio, and have competent products to go in every possible segment. The Fiesta hatchback should be there in the segment of Polo and Punto, The Fiesta sedan with full variant choices in C2 segment, the Focus sedan in the D1 segment and even the Mondeo for the D2 space. And not to mention the multitude of MPV/Cross over choices they have (B-Max, S-Max, Kuga etc.). Instead of that, all they have is two cars based on old Fiesta platforms (Classic and Figo), and two on current Fiesta platform (Fiesta and Ecosport). The Endeavor is just too old to mention.

They donít need to be in the rat race, or try to emulate Maruti. But they can be more serious to the customers in Indian market, and just play up to their capabilities, rather than keeping India as an export hub. It looks like that One Ford philosophy is already backfiring with the Ecosport getting panned across European markets.
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Old 3rd December 2014, 18:33   #9
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Default Re: Ford: Exports higher than Indian sales

They need a new endeavour/everest at reasonable price point and a attractive new figo. That is the best they can do at this point of time. They have messed up the fiesta with pricing.
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Old 3rd December 2014, 20:11   #10
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Default Re: Ford: Exports higher than Indian sales

I actually don't mind this state of affairs, though I would like see to more local sales for Ford's brilliant cars. The exports are very much welcome, since it brings in much needed FDI, helps the balance of payments, helps provide employment, helps expand the supplier and component structure, as well as drives infrastructure development in roads and ports.

I wouldn't care if they decided to export 90% of the production, so long as they make more of their international models (such as the Mondeo and Fiesta hatchback) in India and sold a few of them locally to those discerning enough to understand the value of such cars.
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Old 3rd December 2014, 22:03   #11
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Default Re: Ford: Exports higher than Indian sales

Definitely FORD needs to do something to increase it's market share in India but I feel what they are doing is not entirely incomprehensible. Ford's core competencies are that they make fun to drive cars even if it means compromising with space, fuel efficiency and other bells and whistles. But here in India, we all know the buyer preferences are other way round. So to sell in India, FORD would have to move away from their core competency and start producing 'boring' cars. Clearly, they have stuck to their core strength.

The other point which I want to make is that FORD might be worried about their thin service network. They know that increase in sales would just screw their service experience.They don't want to become another Skoda (great cars, horrible service). So selling in more numbers would mean enhancing their service network, which they might not be ready to invest in. (I haven't seen any dealer added in last 2 years)

I see their pricing strategy as a means to scuttle the demand. They only want to sell a specific number of cars in India and price the car to meet the demand. What else explains long waits for duds like the new Fiesta.

At the end, if this strategy of making India an export hub helps FORD maintain it's presence in India, I am nothing but happy. Atleast this keeps my hopes of seeing and owing FTD cars like Mondeo and Focus alive.
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Old 4th December 2014, 05:54   #12
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Default Re: Ford: Exports higher than Indian sales

I kinda get it why ford wants to send most of its production abroad. Most videshi manufacturers came here because their native markets were saturated, and they wanted to grow. but given a choice between selling here and there, they'll choose selling abroad, because the margins for the product itself, as well as the other associated services are just higher, and a better investment for a scarce resource, resulting in a higher revenue stream.

For Manufacturers who use india as an export base, we will always be treated like step children. We'll have their export surplus and seconds.

Last edited by greenhorn : 4th December 2014 at 05:55.
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Old 4th December 2014, 08:57   #13
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Default Re: Ford: Exports higher than Indian sales

Quote:
Originally Posted by GTO View Post
Actually, I can find a lot of fault with Ford.

A company that sells mere 5,600 units after spending 17 years in the country needs to overhaul its strategy. I'm guessing Ford is here to do business locally, not merely contract manufacture for other countries.
Quote:
Originally Posted by vb-san View Post
With Ecosport, after the agonizing launch when it was launched, they prioritized exports, with a total disregard to the local market.
A lot of companies set up their shops here since liberalization, and except very few, nobody has been able to sell enough to justify their presence here. Lets face it, Ford do not have the products that Indians want. Ecosport sells well, but only until Maruti or Hyundai begins to sell their light-weight, structurally-compromised, CSUVs. No matter how they try they are not going to sell like the Japs and Kors.

If I manufacture something which sells for a higher profit if exported, I'd export everything, especially if building a local market does not look promising in the near future.
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Old 4th December 2014, 09:11   #14
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Default Re: Ford: Exports higher than Indian sales

Ah! A post about Ford but the first thing that anybody can comment on is Maruti/Hyundai.

If the formula is so simple and Indians are gullible to fall for it, maybe the geniuses at Ford should start doing it.

They are one of the manufacturers not able to keep up with the rapid pace of development of their competitors. Sure, the competitors sometimes might bring in simple facelifts or silly limited editions. But they sell.

What's stopping Ford from doing it? Also the drivers' car excuse is getting a bit old. This is India. We have one car to go the mall, to the office, to the forest. We need an allrounder. How difficult it is to provide something that their potential customers want?

Have they fixed the LHD controls that used to be prevalent in the previous models? If not, it shows how serious they are about Indian customers.

I have driven a lot of Fords when I was abroad. It sure is a good car. They cater well to that market. But their efforts here has been very disappointing to say the least.

Where is the Petrol + DCT Fiesta now Ford?
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Old 4th December 2014, 09:18   #15
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Default Re: Ford: Exports higher than Indian sales

I am sure nobody has anything against Ford's strategy of making India an export base.

We may however, not agree with India being an export-ONLY base. For the reasons mentioned earlier by the mods (Adita, Zappo, GTO) and vb-san, it is Ford's strategy on selling cars in India that is really a problem.

They have the DNA of good cars with safety, build quality, good ride and handling, good steering, etc. But their product strategy is different for different products with no consistency at all:

--Fiesta: hot sedan which can compete in a hot segment which is on fire with the City and the Ciaz. The new car is priced well and has several pricing advantages, varaint to variant, with the City and the Ciaz. Ford chooses not to market it at all. Dumbfounding!

--Figo: had a good start, good DNA. No major refreshes even though Ford had the chance to play in the biggest segment: hatchbacks.

--Ecosport: as mentioned earlier by the guys above, huge lack of strategy and concern about Brand image.

I think Ford can have different strategy for different products, but they cannot compromise on some fundamental marketing values which define Ford as a brand does not matter which country they are working in.
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