[blackbandit]

Originally Posted by GTO

Meeting goes:

CEO: But we've tried everything we possibly can to enhance their sales??!!

MBA managers: Lets improve profits by milking those who have already decided to buy the Figo / Aspire. Lets remove some features that no one other than those irritating Team-BHP guys will notice.

CEO: Very smart. I'm so glad that we hired young talent like you. What else?

NOTE: No offence to MBAs; I'm one myself!

A good one !! indeed the features removed wont be noticed. I just conveyed the news to my dad and he was hardly struck

[jetsetgo08]

Originally Posted by narayan

Without commenting on the astute/shrewdness of the average Indian car buyer, I can safely say that most prospective car buyers in many of the entry segments will evaluate all the various brands and finally end up at Maruti or Hyundai's shop.

+1. This is what 90% of the customers would buy after years of contemplation.

Originally Posted by narayan

My opinion is that the very few who would opt for other brands(including Ford) may not get turned away because of these feature changes.

Unfortunately those few who prefer the other brands rely on internet comparisons and discussions where Ford, now would be criticized for cost-cutting on some features.

[rrsteer]

Originally Posted by Mad Max

Looks like a MBA prep is working on a cost-optimization project within Ford India

Originally Posted by prkiran

Guess some overenthusiastic MBA has rolled out some six sigma projects at Ford.

Originally Posted by GTO

MBA managers: At the same time, let's also increase prices. Let Maruti offer more for less. We'll rake in the moolah by offering LESS FOR MORE!

Let me just begin by stating that I am not to defend MBAs or senior managers. I am just inquisitive about reality, what are the factors/pressures behind such decisions.

I have seen quite often in T-BHP, MBAs (which I think is refrence to decision making middle or even senior management) being lashed at. But in all fairness to them these are also human beings. They also drive cars, have emotions, understand fairness, have families. Its not like they have a sycophant mode on all the time. Even in a work environment.
These guys..lets face it..did better than a whole lot of others on a number of parameters to reach the positions they have reached.
So, I want to understand why are we so quick to point fingers at them? Can there be other underlying forces at play which make them reach the decisions they do? Why do we make it such a simple inference?

Thing like Enron, Worldcom do happen, but in my limited experience, whenever I interact with a person in the corporate world with superior work ethics and decision making abilities, I very often find them to be IIM-A, B,C passouts or a McK background.

PS: I am in no way patronizing or defending the above institutions and have never worked or studied in any of them. It is just my casual observation.

[thoma]

In my opinion, these omissions are nothing when compared to the omissions on the Ecosport. I do not feel any of these feature cut as a real deal breaker. But what I really don't understand is how much real money Ford is gaining from each of these feature cut. What does this exercise actually transform into?

[JonSnow]

Originally Posted by narayan

My opinion is that the very few who would opt for other brands(including Ford) may not get turned away because of these feature changes.

I agree. Also, I'm not sure if many customers would care about things like fabric inserts and vanity mirrors. Even customers who compare features would be more interested in fancy features, like touchscreen head unit for example. Other than enthusiasts who follow these developments closely, most customers may not even realize some features have been dropped compared to before.

Lets see the sales numbers for these cars in the upcoming months and see how many buyers they lose due to this.

Looking at the sales trends of these cars, I doubt we can conclude if any sales impact is because of these changes or not.

[amtak]

Originally Posted by narayan

I would say well done Ford for atleast not cutting on safety features. With sales down, manufacturers have to do some cost cutting to stay afloat. I don't see any of these cuts as real deal breakers for someone who would consider the Aspire. It would be mostly internet critics like us who would keep nitpicking.

Totally with you on this. The only thing which may be worth mentioning is height adjustable seat belts; however, they are also not a deal breaker. I have a Ford Figo DCT and I know how happy I am with the purchase.

Less sales for me is a boon, as I get nice stares on the road!

[kpzen]

Hey Guys :

Would like to clarify few things here :
1. I'm not associated with Ford
2. I'm not supporting Ford's strategy of omitting features

To me, its not fair to condemn a manufacturer as stupid and useless without understanding the reasons.
Hence, I am just trying to present the facts and current challenges in manufacturing.

Originally Posted by Torquedo

Does everything that you have mentioned happen as the new year dawns in ?

No. It has nothing to do with New Year.
Month on month, the commodity cost keep rising and falling but the steep rise in last 4 months is alarming and abnormal.

Originally Posted by Torquedo

Have all manufacturers increased the prices (well a handful have) ?

Some will do now, some will wait and watch.
Eventually, everyone would be forced to increase in some way.

Strategy may vary but prices aren't going down for sure !!


Below is my assumption based on experience:
Volume players like Maruti and Hyundai would have the capacity to absorb the impact for longer period.
Small players with limited model line-up would immediately start passing the impact to customer by omitting features or hiking the price.

Originally Posted by Torquedo

Ford, Chevy and a few others are not surviving on Indian operations, they need to build the base here and go from there.

Low initial margins for volumes should be the game plan for the tertiary players like Ford, Chevy etc.

Valid logical advise.
But practically, its easier said than done.

Originally Posted by GTO

The same way successful manufacturers are surviving. Taking value away from customers is damaging in the longer-term. Building & selling cars isn't rocket science - it's a 100 year old business.

Dear Rush,

I work for a 98 year old manufacturing company and believe me the rise in commodity prices is having a huge impact on product pricing.
In China, Coking factories are being shutdown resulting in steel price going up by more than Rs 12 per kg.
Similarly in Africa, due to some turbulence there is severe rise in Zinc prices. Impacting all electronics.

Allow me to explain with an example :

Y = X * M + FC

Y = Turnover
X = Sales Qty
M = Margin
FC = Fixed Cost ( Employee salary + Manufacturing Facilities)

Y is constant as it is the target figure:
Now if Sales quantity (X) is going down,
and Margin(M) is disappearing due to rise in commodity prices
FC shall remain constant unless the BOSS decides to lay off people or sell assets.

How to achieve Y ?

Originally Posted by MotoNanu

Well, I guess 'subraiyr' has answered your question in a way!

Not really.

[Chetan_Rao]

Given Ford's lack of sales volume, it doesn't make much sense to omit features that don't cost much individually. Expensive bits being removed would be understandable cost-wise (not acceptable, mind ), but this is just being foolish.

Whatever they sell of the Figo/Aspire, the 'more for less' a.k.a. VFM perception plays a big part in that price band, and this puts an unnecessary dent in it.

They'll probably lose more of their already-low sales than any potential savings from this exercise. Not to forget they've shot their bestseller Ecosport with the same bullet recently, one wonders what's happening at Ford India.

P.S. Don't want to give them ideas, but I have a feeling the extra airbags in T+ variant will be the next casualty of the MBA hotshot behind this idiocy.

[Vid6639]

The Figo and Aspire both haven't exactly flopped but neither have they done great in numbers. Whatever sales it was doing, it was because it was good VFM and had more features at a lower price tag. By removing features they are doing away with the advantage and the primary reason they were getting sales.

The Baleno and i20 are so much more superior as premium hatches vs the Figo and it's not hard to see why they lead sales. The Figo had the better diesel motor than both of them as well as 6 airbags. Even with that the sales figures were nowhere close to the Baleno and i20.

This is akin to that hindi saying of chopping of one's own legs.

There should have been better ways to improve margins and not by chopping features. A new variant perhaps? Add more features to the Titanium+ like LED DRL+ projectors+parking sensors+ with a higher price tag to improve margin.

[redbaron91]

Originally Posted by Vid6639

There should have been better ways to improve margins and not by chopping features. A new variant perhaps? Add more features to the Titanium+ like LED DRL+ projectors+parking sensors+ with a higher price tag to improve margin.

Thinking in perspective of a part buyer in OEM, adding new features like DRL for Figo/Aspire will result in developing a new unique part for the model, which will incur lot of cost to the project which is already few years down its life cycle.

Similar case was well mentioned by kpzen

[Vid6639]

Originally Posted by redbaron91

Thinking in perspective of a part buyer in OEM, adding new features like DRL for Figo/Aspire will result in developing a new unique part for the model, which will incur lot of cost to the project which is already few years down its life cycle.

Similar case was well mentioned by kpzen

Few years down it's life cycle? The Figo was launched in end of 2015, it's just over a year old in the indian market.

The Ecosport in comparison is around since 2013.

[redbaron91]

Originally Posted by Vid6639

Few years down it's life cycle? The Figo was launched in end of 2015, it's just over a year old in the indian market.

The Ecosport in comparison is around since 2013.

Yea, you are right. I got it messed up with thoughts of same concern in Ecosport. But my point was, developing a new part and putting in vehicle without a proper face lift and increase in price won't help a car maker.

Figo/Aspires case is clear, they tried to have good VFM with good power train and features initially, by compromising on build quality (you can see how flimsy the BIW is). But low volume sales forced them to cut cost by omitting few features.

The case is not the same with Maruthi, they have cars in good spectrum of price range, with parts carried over among each other. This helps them in reducing development cost & time. And the margin from a low volume of car will get diluted to some extend if another car does well.

[vinit.merchant]

Really Ford?

You first slash prices 6 months back, of Figo twins top end variants like there is no tomorrow, leaving existing customers a sour taste.
Now, you jack up prices and remove feature on models like Figo & Aspire which are not exactly built as per Ford standards we were aware of. Lets just say both these models are flimsy in built as compared to what Ford build usually stands for.

So what exactly happened to those 200 crore (did I get that right?) brand transformation campaign?

Probably they ran out of that 200 crore and are now trying to bring the prices of the car at break even.

Lame, very very lame.

[dark.knight]

If I may point out the obvious, the past 3-4 years have all Indians boasting about their new-found consumerist lifestyle, à la America. Somehow it also seems that people are happy for car companies doing well with 3-4x better sales than before, despite most of the major city roads being choked and blocked beyond recognition, I'm talking Kolkata, Bengaluru, Mumbai, Delhi. Small towns too are increasingly bearing the brunt of this purchasing assault like those in U.P, M.P and Kerala.

I never imagined that India was ready for such purchasing and I was right, the demand had to dwindle at some point and it will show from this year in particular. India is a contrasting nation, so the sales of Rs.50L+ vehicles might not go down by too much yet those who are competing at the low-end AND aren't amongst the country's favourite brands shall be affected deeply.

Ford, VW, Skoda, Fiat fall into this category, mostly because of their lack of service support. Ford despite being better at service do not yet have a single defining star product in their portfolio, that is their major fault. Ecosport was doing well until Creta attacked it in the high-variant market and Maruti's mini-suv attacked it in the low-variant market and that halved its sales despite being a well-made car. Figo and Aspire both aren't as well made and did have a "budget" image in them, they thought these would be perfect to gain foothold in India but as their bad luck would have it, Indians started desiring "snob" appeal and radical designs just at that point.

This isn't about MBA's or cost cutting or considering the Indian consumers as inferior, its quite obvious. The present superficial cost-cutting is to protect against rising costs partially, and also by imposing a price-hike. This will be temporary, like plugging a hole to stop the leaking boat. There were better ways to go about it, instead they chose to do this :

1) Launch Figo and Aspire at competitive rates.
2) Due to falling sales give heavy discounts of 40-60k on both.
3) Cut superficial features/aspects of the car.
4) Increase price.

Step 2 could've easily been avoided, and had it been avoided then steps 3 and 4 would've been quite unnecessary. I guess they expected a massive boost in sales due to the discounted prices and that didn't happen. No one needs to pity the company though, Ford is far bigger than its Indian operations, they can piggy-back on American soil till eternity.

[amtak]

Originally Posted by Vid6639

There should have been better ways to improve margins and not by chopping features. A new variant perhaps? Add more features to the Titanium+ like LED DRL+ projectors+parking sensors+ with a higher price tag to improve margin.

When I was taking delivery of my car, there was an official from Ford India to see the entire process; this is precisely what I told him - when you facelift the car, please launch it with projector headlights, DRL's and other fancy stuff that people can see. I bought the car over I20, for the safety features that the car offers. Sadly, we are in India and people give importance to a reversing cam over ESP/EBD