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Old 13th April 2019, 08:44   #166
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

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Originally Posted by narayan View Post
So has either party confirmed this ? Else our title should reflect that in my view
Agreed, thanks . "Rumour" tag has been added to the title. Henceforth, please "report the post" for quicker action.
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Old 13th April 2019, 09:15   #167
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

Discounts being offered in Mumbai on Ford cars. Received SMS for the same (see attached). Effects already being seen.
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Ford to end independent operations in India; will hold 49% in JV with Mahindra-screenshot_20190412155648_messages.jpg  

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Old 13th April 2019, 09:47   #168
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Originally Posted by ruzbehxyz View Post
Discounts being offered in Mumbai on Ford cars. Received SMS for the same (see attached). Effects already being seen.
Buddy, could you provide any basis to correlate discounts on ford cars with the speculation?

AFAIK, these discounts were already present before that news emerged.

Just my two cents!
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Old 13th April 2019, 10:22   #169
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

In my opinion Ford will be able to concentrate on manufacturing and actually sell more due to Mahindra's vast marketing and service network.
Rural rich who desire better but stick to Maruti, Mahindra and to some extent Tata and a few rare Toyotas will have another option.
I travel a lot in the hinterland of Maharashtra and North Karnataka, and these are the only trusted brands, and many are now disillusioned with Toyota as well.


Rahul

Last edited by manson : 18th April 2019 at 15:12. Reason: Typo.
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Old 13th April 2019, 10:57   #170
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

What went wrong with Ford? No strategy seems to be working for them, lately!

In their initial days, they faced flak due to their strategy of soldiering on with a dated product line (the Ikon and gen-1 Endeavour). Then came the two cars that were way before their time (in India) - the Fusion (that would've done splendidly a few years later) and the Mondeo (a driver's dream, a reseller's nightmare). The Figo and gen-1 Fiesta truly opened the floodgates to Ford's success in India, but then the gen-2 Fiesta bombed in our market due (and how!) due to a myriad of reasons (disproportionate styling, mediocre interior quality and room, discontinuation of petrol engine with the facelift, etc.)

Then the stylish Ecosport happened and they were back in the game. This car remains responsible for popularising the compact SUV trend, and has only got better with the subsequent refreshes. But all their later launches seem to have met with a lukewarm response, at best. The new Figo, which in my opinion, is one of the most well-rounded and better-looking cars in the segment (not to mention the stonker of a diesel engine), never really took off. And though the Aspire didn't really bring anything to the compact sedan market, it carried over all the virtues of the Figo and remains a sensible choice till date. The Endeavour (my personal favourite in the premium SUV segment) kept getting outsold by the Fortuner, despite being equally competent (and better in some areas like dynamics, interiors, and gizmos). The facelifts of Figo and Aspire also don't seem to have done anything to remedy the poor sales, despite being incredibly tasteful (all Honda does is slap a boatload of chrome, and their sales still soar!). The introduction of Mustang as a halo product also seems to have done no wonders (our tax structure for imports didn't help it, either!)

I'm not saying they haven't done any mistakes - their constant feature and variant goof-up is terribly annoying, they never bothered to plug the hole left by the discontinued Fiesta, and their cars were initially overpriced. But does it really deserve the cold shoulder given by the Indian auto market? Honda has gone premium with the pricing and economy with the materials; Hyundai is steadily climbing the price ladder in every segment; Maruti-Suzuki keeps offering old wine in new, economy-grade bottles and gets away with it; Toyota hasn't bothered much with the other segments since the Innova and Fortuner are bringing in the cash - there are umpteen examples of companies with strategies a lot flawed than Ford India. Then why has Ford been compelled to take such drastic measures despite offering very well-engineered, safe, and relatively VFM products? I'm sad to see Ford go down this way, although the JV with Mahindra will ensure great technical collaboration between these two companies.

Last edited by RoverX : 13th April 2019 at 11:09.
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Old 13th April 2019, 11:09   #171
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

Ford spruces up its EU operations, closes factories that are unprofitable and axes models that have weak sales.

Quote:
Ford Ka will be out of line in Europe.
High sales were never the strongest of the model and by 2020 the Ford Ka would become too polluting. European model is produced in India
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Old 13th April 2019, 11:46   #172
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

Ford can still turn things around. Car ownership landscape is about to change and one would have to be blind to ignore the EVs. Ford can get a bit aggressive with few things -

1) Push EVs hard. Market them well. Offer good variants.

2) Make the service aspect like the toyotas. I think they are already alright here (from what I hear).

However, I understand, one of the reasons for this Mahindra partnership could be for the EV development. Ford could very well have gone alone on this. The alliance may not work in their favor.

If the incompetent leadership cannot learn from GMs failure in India and their own 20-yr stint here, may as well shut shop and move on.
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Old 13th April 2019, 13:44   #173
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

Some thoughts. This is a logical and necessary decision for any mass market car manufacturer which lacks the scale to compete in a given market. When the large global manufacturers entered India, they did so with a few assumptions: 1) The Indian market will grow rapidly, 2) As the markets grows and matures, it will shift towards products that are similar to those seen in other parts of the world; 3) Tariffs will come down over time.

All these assumptions have been belied.

1) Car sales did grow rapidly from 2006-2011 : from 1.1 mm units to 2.4 mm units - viz a growth rate of nearly 17% pa. But thanks to continuous increases in taxes since then (Excise on large cars was 22% and state VAT was typically 14%, which has risen to 53% GST) plus the INR depreciation which made cars costlier), growth since then has averaged under 5% pa
2) Our skewed and stupid taxation system - the sub 4 metre rule has made the compact sedan - viz generally unsafe and uniquely Indian vehicles - the largest and fastest growing segment of the market - with the compact SUV also gaining share. Manufacturers which want to compete in India have to design uniquely Indian vehicles and canít get heir global products here.
3) Tariffs have only increased with time. The 60% tariff on imported cars seemed obscene, but we then outdid ourselves with a 100% tariff. The tariffs on SKD kits and CKD kits have also risen
4) in a very unequal society like India, the rich want to buy global luxury brands - hence Mercedes outsells the entire D segment.
In short, a manufacturer has to create a uniquely Indian business model to compete here. Maruti and Hyundai have done it, and Mahindra and Tata are investing crazy sums to get there since this is their home market. For Ford or GM, this is not viable - and hence they choose to either pull out or partner.
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Old 13th April 2019, 15:45   #174
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

People buy what they want with their money.

Ford is just another company in the automobile market. The car buying public has no responsibility or obligation to support Ford.

That the EcoSport sells around 4000 units a month is ample proof that the car buyers are supportive of Ford if the product matches their expectations.

If Maruti or Hyundai or Toyota matches buyers' expectations in some other segments better than Ford, why should they buy Ford products instead of these manufacturers?

There were reports earlier in this forum that the EcoSport that Ford sell here and the one that they used to export from here had different quality / build standards. So Ford is not showing any special treatment to Indian buyers either.

Ford may have their reasons for pulling out or entering into JV agreements, it is their business decision.

But I see no point in directly or indirectly blaming the Indian car buyer or Maruti or Hyundai for that decision.

(Happened to see a few comments here in this direction, so adding my comment in response)
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Old 13th April 2019, 18:57   #175
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

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Originally Posted by Hayek View Post


2) Our skewed and stupid taxation system - the sub 4 metre rule has made the compact sedan - viz generally unsafe and uniquely Indian vehicles - the largest and fastest growing segment of the market - with the compact SUV also gaining share. Manufacturers which want to compete in India have to design uniquely Indian vehicles and canít get heir global products here.
3) Tariffs have only increased with time. The 60% tariff on imported cars seemed obscene, but we then outdid ourselves with a 100% tariff. The tariffs on SKD kits and CKD kits have also risen
I don't agree with the above 2 points.

In a country with skewed roads and exploding population, the 4m rule allows more cars on road. Similarly, smaller engines lead to fuel efficiency. 80% of money outgoing is on fuel.

Tariffs- car companies get various benefits from govt, including tax benefits, when they setup a shop here. The govt does that to encourage local manufacturing which in turn will create jobs. If that is not happening, then the govt has the right to tax imports. This is something that the car companies know well before. If Ford (For example) can localize almost everything and export to rake in huge profits, what's the point in bringing CKD or CBU components for local sales?

Car companies need to study the local environment well before they commit to a country. If you start selling cars without having locally manufactured spares, the customer is going to see the service cost high. And then this news spreads which in turn slows sales . And this cycle goes on. A Benz customer will be willing to pay for imported spares not a Ford or VW customer.

Let's not blame customers or government. The manufacturers have to take the blame.
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Old 18th April 2019, 11:17   #176
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

Mahindra, Ford sign agreement to co-develop a midsize SUV.

The new midsize sports utility vehicle (C-SUV) will have a common Mahindra product platform and powertrain.

Quote:
The strategic alliance between the two companies is focused on leveraging the benefits of both companies -- Ford’s global reach and expertise and Mahindra’s scale and successful operating model in India. Teams from both companies continue to collaborate on all areas of mutual interest including electrification, distribution and product development
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Last edited by volkman10 : 18th April 2019 at 11:19.
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Old 18th April 2019, 14:54   #177
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

^^ This was expected and if all goes well, I think this collaboration should be great. Ford needs a C-SUV above the Ecosport and the Escape is probably too expensive to bring to India.

Ford should ensure the final product feels like a Ford (driver focussed) and not lose it's identity in the process. Fingers crossed !
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Old 19th April 2019, 11:07   #178
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

Ford to pump in $ 150 Million / Rs 1044 Crores for the co-development of the SUV with Mahindra and will pay Mahindra Rs 680 Crores. Ford India will spend upto Rs 300 Crores on developing a different top hat and body to differentiate it from the Mahindra offering to avoid cannibalization.

In my view, if Ford and Mahindra do this model right, it can be a great competitor to Creta and Harrier. Ford should also look to get the Escape to sit above this model to compete with Jeep and Puma as a more premium offering on top of the Ecosport.

Link: https://auto.economictimes.indiatime...p-suv/68948797


Quote:
US carmaker Ford has committed a fresh infusion of $150 million (₹1,044 crore) into its Indian subsidiary at a time when the company is taking a tough stance on right-sizing operations around the world as part of its $14-billion global cost-savings plan.

Ford’s Indian subsidiary on Thursday signed an agreement with Mahindra and Mahindra to develop a mid-sized SUV at an expected investment of ₹680 crore or about $97 million.

As part of the agreement, Mahindra will develop the SUV and also manufacture and supply it to Ford for a period of 10 years.

While ₹680 crore is being paid to Mahindra & Mahindra for developing the vehicle architecture and engine, Ford India will be investing an additional ₹250-300 crore in developing its own top-hat or body to have a differentiated design from Mahindra's product on this platform (the next generation XUV 500) to avoid cannibalisation, people in the know said. Ford’s recently inaugurated product development centre will play a lead responsibility in designing the new SUV.

Since the SUV will be based on Mahindra’s existing platform and powertrain, it will bring down the cost of development and manufacturing for both carmakers. Developing the product on its own could have cost Ford up to $250 million (₹1,740 crore), sources close to the development told ET.

At Mahindra, the project is internally codenamed W601 and the offspring for Ford is called W605. The sourcing teams from both the companies have started working together on the project to ensure the benefit of economies of scale.

“The investment which either of us would have made alone, that we will now make together,” Pawan Goenka, managing director of Mahindra & Mahindra, had told ET earlier while discussing the benefits of the alliance. “Plus, we get the benefit of cost reduction because in this kind of hardware, the economy of scale reduces the cost.”

Post development, the ‘consideration’ that Mahindra will charge Ford for the supply of these SUVs will be based on the number of units that Ford orders, Mahindra said in a regulatory filing.

Ford intends to export this SUV to emerging markets. With the India operations delivering profits after a decade in FY18 on the back of strong exports, the country is becoming a beachhead for Ford to expand into emerging markets. The company is the largest exporter of PVs from India, exporting as many as 1.63 lakh units in FY19.

“With today’s announcement, we not only strengthen our ongoing partnership with Mahindra but also sharpen our competitiveness in an important emerging market like India,” said Jim Farley, president, Ford New Businesses, Technology & Strategy.
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Old 19th April 2019, 11:31   #179
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Default re: Ford to end independent operations in India; will hold 49% in JV with Mahindra

This is the way to go for all manufacturers who are unable to ring in the numbers. JVs such as this will ensure that the strengths of both companies merge and the shortcomings are limited.
It would have been great to see Fiat do so successfully in India given their solid automotive technology.
GM could have saved themselves an ignominious exit from India.
Ford possesses technology that Mahindra can leverage and grow.
Good move from Ford and Mahindra.
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Old 19th April 2019, 13:44   #180
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So it looks like a production based JV and not really an all out JV as many predicted. It may be that Ford keeps costs down getting Mahindra to develop newer platforms and models, while it may continue to leverage its own dealer network and distribution.

What this does for Ford is that they can go either way in the future, that is invest more in India or take an easy exit out of the country without huge investments in the pipeline.

I guess ford had to do this. Unlike VW, they are a much smaller company globally and hence does not have the financial muscle to sustain alone for another decade.
And this also means that Mahindra is firmly on target to cement its no 3 position in India. They have this JV which will finally give them access to some proper car platforms for a hatch or even a compact sedan, which they lack now.
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