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Old 19th October 2021, 14:08   #31
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re: The rise and fall of Ford India | The most comprehensive study

Brilliant thread and neatly summarizes Ford's track record in one place. Their forte was SUV's and that's the craze in our market currently. Had they they tuned it to local tastes, they would have witnessed another EcoSport moment in their HQ
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Old 19th October 2021, 15:14   #32
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re: The rise and fall of Ford India | The most comprehensive study

Superb analysis!

The reasons were many, but ultimately if you had products like the Ikon and the Ecosport and still couldn't make it in the market, means something was certainly wrong with the strategy.

The Ikon and Ecosport were 2 category defining vehicles, highly desirable, everyone I knew wanted one when they were released. Ford got arrogant with the Ecosport for sure. More than one dealer adopted a "take it or leave it, we have a waiting list anyway". (One dealer actually said that to a friend who wanted a test drive!)

Can't take customers/the Indian market for granted and still expect to do well, especially when brands like Hyundai are thriving and showing it's possible.
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Old 19th October 2021, 15:27   #33
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re: The rise and fall of Ford India | The most comprehensive study

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Originally Posted by am1m View Post
Superb analysis!


Can't take customers/the Indian market for granted and still expect to do well
Have to disagree here. Every dealer (hyundai, Skoda, VW, Kia, MS) seem to adopt that attitude when they have a hit car on their hands.
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Old 20th October 2021, 21:19   #34
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re: The rise and fall of Ford India | The most comprehensive study

Quote:
Originally Posted by V.Narayan View Post
Using this post by Member @QuilonSpitfire to address the issue of the sub-4 metre rule. My views are not aimed at the author who by the way has a great sounding handle:-)

On team BHP I often read the view criticizing the sub 4-metre rule. I wonder why? In our country with its crowded roads, mixed forms of traffic, often narrow roads within cities it makes sense to encourage cars with the smallest footprint and tightest turning circle. Of course building public transport infrastructure would be even better. I believe, and will state at the risk of my neck being throttled on the forum, that we should also have an even greater concession for cars shorter than 3.6 metres. The road width of our inner cities and already built areas cannot be increased very much so the next best is to reduce vehicle footprint and improve public transport . Sadly progress with the latter is patchy except for the metro construction in now 13 cities.

Provocative question - should the Govt place a ceiling on engine sizes on cars, sold in India, at 1800 cc. After 1800 cc the increased engine size only adds to speed and vrooom-vroom factor. It ceases to contribute to the role of a car i.e. to transport up to 4 or 5 people in relative safety at a reasonable speed.
I do agree with you on the govt bringing a law to put some kind of restrictions on engines over 1.8-2L. Current safety rules and stricter emissions are already a lot to handle for the car manufacturers and on top of it is our sub 4m rule. If you look at the sales stats of Renault, who introduced not one but three India specific models (Kiger, Triber & Kwid) is not even in the top ten sold cars but also behind the Innova in sales number. The same problem is also faced by Datsun. This will force more and more manufacturers to leave India.
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Old 20th October 2021, 21:46   #35
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re: The rise and fall of Ford India | The most comprehensive study

Quote:
Originally Posted by am1m View Post
Superb analysis!

The reasons were many, but ultimately if you had products like the Ikon and the Ecosport and still couldn't make it in the market, means something was certainly wrong with the strategy.

The Ikon and Ecosport were 2 category defining vehicles, highly desirable, everyone I knew wanted one when they were released. Ford got arrogant with the Ecosport for sure. More than one dealer adopted a "take it or leave it, we have a waiting list anyway". (One dealer actually said that to a friend who wanted a test drive!)

Can't take customers/the Indian market for granted and still expect to do well, especially when brands like Hyundai are thriving and showing it's possible.
Agree. Even the 1st gen Fiesta had reasonable sales. Ford just couldn't build on that platform and lost its way.

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Originally Posted by sid3091 View Post
Have to disagree here. Every dealer (hyundai, Skoda, VW, Kia, MS) seem to adopt that attitude when they have a hit car on their hands.
I dont know about Skoda, VW, Kia. I have experienced some attitude with Hyundai when I booked by Creata in 2017. But in spite of being the top seller, MS dealers actually treat customers well. They may not give you discounts, but are rarely rude.

I can also see a marked difference in the service between my WagonR and Creta at the respective service centers.
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Old 20th October 2021, 21:53   #36
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re: The rise and fall of Ford India | The most comprehensive study

Brilliant analysis. That was a great read !
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Old 20th October 2021, 22:13   #37
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re: The rise and fall of Ford India | The most comprehensive study

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Originally Posted by QuilonSpitfire View Post
I do agree with you on the govt bringing a law to put some kind of restrictions on engines over 1.8-2L. Current safety rules and stricter emissions are already a lot to handle for the car manufacturers and on top of it is our sub 4m rule. If you look at the sales stats of Renault, who introduced not one but three India specific models (Kiger, Triber & Kwid) is not even in the top ten sold cars but also behind the Innova in sales number. The same problem is also faced by Datsun. This will force more and more manufacturers to leave India.
Thank you for the point you make. Permit me to differ. It is not the responsibility of the Govt to teach car makers how to make and sell successfully. Most of these car makers have been given substantial concessions by respective State Govt's to establish their manufacturing plants. I don't here much talk on that. If Renault cannot make three cars work they need to seriously introspect on their own management and decision making. Some manufacturers that cannot make the cut will leave. It is not the Govt's job to bail out private sector big time players who can't make the cut. As an entrepreneur myself, of some standing I dare say, I have zero empathy for multi-billion $ corporations that lose their way in a large market where their competitors learn how to operate profitably. But then let each of us have our own views.
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Old 26th October 2021, 22:02   #38
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Re: The rise and fall of Ford India | The most comprehensive study

The article was a lengthy one and not an easy read by any measure. I am grateful to you - and every other petrolhead on Team BHP - who took time off their schedule to peruse it. I am overwhelmed by the response the article garnered and tremendously encouraged to work on the next one.


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Originally Posted by Dr.AD View Post
Even the brands in the niche and luxury market realized this and played their cards accordingly. BMW did not depend only on the 3 series (which is globally their bread and butter model) to sell in India. They brought in the X1 (which was perfect for Indian market and sold reasonably well), and then they also made sure they had 5 series, X3, 3GT and etc which all sold reasonably well. Mercedes too had multiple cars. As a result, BMW and Mercedes are again leading the luxury segment in India. Whereas Audi, which unfortunately depended on one or two models most of the times (A4 and Q3) finds itself in serious troubles
Food for thought. 2nd generation BMW X1 and Audi Q3 have been best selling cars in their respective brand’s portfolio. Owing to lower price points, they contribute, or used to contribute, nearly 25%-40% of the entire volume. The case of Mercedes-Benz is a little different, where E-Class has remained the best-selling car, not mere in Mercedes’s India portfolio, but the entire Indian luxury car market. Also, 1st generation GLA was a shamelessly jacked up hatchback, and didn’t garner so much attention, unlike the other two, having crossover silhouette.


The rise and fall of Ford India | The most comprehensive study-1.jpg

Though the Indian luxury car market is at a near stagnant level since 2015, still luxury carmaker - Mercedes Benz and BMW - has been fiercely competitive in India.

Unlike the mass market, the sedan still contributes 50% of the luxury car market, as owners are mostly chauffeur driven. Long-wheel-base (LWB) E-Class launched in 2017 was a game changing product. To counter Mercedes, BMW has fielded two products – 5 Series and 6 Series GT. In fact, in a segment below also, BMW has fielded 3 Series and its LWB version to expand the price spectrum and counter the competitive threat. Before that, BMW use to have a 3 Series GT (3GT) with slightly larger cabin and panoramic sunroof to expand the nameplate range, and 3GT use to sell slightly more than 3 Series. It may lead to cannibalization of its own products, but at the end of the day, BMW will be able to keep the customer in its fold. Steve Jobs famously said and GTO keeps on reminding - “If you don’t cannibalize yourself, someone else will”. How Audi India countered it, they simply started a new business model of selling ‘discount’. With petrol only engine option (April 2020 onward - BS6 era) and ‘discount’ selling business model, it seems the fate of Audi is sealed and how.

Quote:
Originally Posted by sandeepmohan View Post
What takes me by surprise about the Ikon's initial 70% localization content, this never felt the case when you had to fix the car. Parts were astronomically priced.
The devil lies in the details. Let me try to illustrate what could be the possible reason with an example. Let us consider the HVAC (heating-ventilation-air-conditioning) system of the car. The table created below lists out various components which goes into the HVAC system along with cost (dummy values). Let us assume some components are imported and some are sourced locally either from a global or local vendor. Now there are two ways of reporting localization %. Either in terms of the number of parts (quantitative) or the cost of the parts (qualitative). Looking at the aggregate value at the bottom end of column (4), the car manufacture can easily claim a localization level of 80%, however, column (6) clearly indicates that imported parts cost 53% of the entire system.


The rise and fall of Ford India | The most comprehensive study-2.jpg

The imported compressor shown in this illustration is the most expensive part and vital as well. So if it goes bad, for what so ever reason, the cost of replacement will hurt the customer’s wallet badly.

And the story does not end here. An imported component is also exposed to foreign exchange development, change in tariff (custom duty) and non-tariff (certification, country specific restriction etc) import barriers imposed by the government from time to time as well, and is vulnerable to adverse development of any of these factors. Let us extend the compressor example further. Let us assume that the imported compressor was priced at $ 200 (usually have very high mark-up) from the country of origin in 2007.


The rise and fall of Ford India | The most comprehensive study-3.jpg

If landed cost was ₹ 8,242 in 2007, it would pinch ₹ 14,739 now, based on the current foreign exchange rate.

There could be a wide range of reasons for sourcing imported parts, like – economies of scale in some global locations, low volume in the local market, unavailability of local vendor or technical know-how, quality concerns etc. Let us see how does this pan out in the real world with the below simulation.

At the time of launch : “We have achieved 80% localization” makes a good PR statement from the manufacturer and creates a false belief of lower price of after sales parts.

Moment of truth : importedpart needs a replacement for whatsoever reason, and customer visits after sales center to discover the astronomically high price of parts. False belief shatters and perception of the high cost of after sales develops, and thanks to word of mouth, it settles down on memory of the existing and potential future customer. End result – your quote summarizes it all.


Quote:
Originally Posted by V.Narayan View Post
On team BHP I often read the view criticizing the sub 4-metre rule. I wonder why? In our country with its crowded roads, mixed forms of traffic, often narrow roads within cities it makes sense to encourage cars with the smallest footprint and tightest turning circle. Of course building public transport infrastructure would be even better. I believe, and will state at the risk of my neck being throttled on the forum, that we should also have an even greater concession for cars shorter than 3.6 metres. The road width of our inner cities and already built areas cannot be increased very much so the next best is to reduce vehicle footprint and improve public transport . Sadly progress with the latter is patchy except for the metro construction in now 13 cities.
Food for thought, Government certainly needs to revisit the whole taxation system and get their objective straight as to what they want to achieve in future, as there are different policy levers to address issues like – road congestion or environmental pollution or reduce consumption of imported crude oil.

In 2006, assumption(s) and objective(s) were different - “On cars, I propose to reduce the excise duty to 16 per cent from 24 per cent, but only for small cars.A small car, for this purpose, will mean a car of length not exceeding 4,000 mm and with anengine capacity not exceeding 1,500 cc for diesel cars and not exceeding 1,200 cc for petrol cars.I am confident that industry will seize the opportunity to make India a hub for the manufacture of small and fuel-efficient cars.” - 2006 Union budget speech by the then Minister of Finance.
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Old 27th October 2021, 04:37   #39
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Re: The rise and fall of Ford India | The most comprehensive study

Quote:
Originally Posted by pqr View Post
The imported compressor shown in this illustration is the most expensive part and vital as well. So if it goes bad, for what so ever reason, the cost of replacement will hurt the customer’s wallet badly.
That's a nice parts breakdown list. I did replace a Evaporator on my car and the price is spot on.

What they have decided to import are components that should ideally not fail. Still puzzles me why they could not source compressors locally when there are OEM's to make >100,000 for Maruti Suzuki. Compressors generally last the life time of the car. It is rare that they fail.

The issue I had with Ford India is parts did not last and I am talking about critical parts, related to the engine cooling system. I must have replaced the ever famous plastic diverter valve (Also known as thermostat) atleast 3 times in 3 years I owned the car. It failed every year. There is no part warranty either. This was known to fail and they did nothing about it in 10 years of producing the car. If you are a responsible manufacturer, you will fix it, use different materials when a said part is known to fail. This one instance was enough for me to never consider the brand again.
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Old 9th December 2021, 11:14   #40
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Re: The rise and fall of Ford India | The most comprehensive study

CNBC's story on Ford's exit from India:
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Old 14th November 2022, 15:59   #41
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Re: The rise and fall of Ford India | The most comprehensive study

That was a great story pqr, supported by extensive analysis of the data. Amazing depth and involving story line.

Quote:
Originally Posted by Dr.AD View Post
Any car manufacturer which depends on only one product for too long eventually runs into trouble in India
Quote:
Originally Posted by svmvale View Post
As rightly pointed out, they were always a one hit wonder. Never had two models pulling in the numbers.
Quote:
Originally Posted by Lalvaz View Post
Wish they had continued with a renewed focus on developing multiple hero products, rather than banking on only one hero product at any one time.
To all the above, Toyota still manages with just Innova in India! Fortuner sold only 10k in 2021. We all know Urban Cruiser and Glanza are just a badge change in desperation.

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Originally Posted by anumod View Post
One thing I would call out to the failures of the models is lack of marketing that is tuned for Indian audience . India loves to own something, where they feel is to Owner’s pride, neighbours envy .
Very good analysis. Absolutely spot on!

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Originally Posted by Lalvaz View Post
Their cars are driver cars and as such, its always a pleasure to drive one, and revel in the direct feedback. The build quality and the overall fit and finish were also better than many competition products, hence its a loss for India to see Ford go.
Cannot agree more on this point. As Anumod said, marketing failed, even with good cars in hand. That does not mean that, they have to go the way the others, at the cost of their own DNA that raked up sales in the past. Never give up the good things in desperation. Rather adopt the good things done by the competition.

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Originally Posted by shivs2003 View Post
1. Indian market cannot run on "Global" Design logic. There have been very few mass market PV which succeeded in the last 25 years which were not "Indian Sub Continent Focused".

2. India is a growing market, hence growing/changing needs. The automaker needs to be agile to understand the same.

3. The ultra big auto players, Toyota, VW, GM, Ford. All these 4 do not do well in India, coincidence much? Excessive centralization and not "region" focused, is a big hindranceto growing in India.
These and the reason for adequate marketing summarizes the whole fiasco, IMHO.

Quote:
Originally Posted by Nithesh_M View Post
Firstly, when they launched the Ecosport at 5.xx lakhs and then because people thronged beyond their imagination to the product, they suddenly went hiking the prices every few months and within a year that car was sold at 8.xx lakhs ex showroom.

The second disaster was the Fiesta gen 2. The customers of the latter segment don't like compromised interior space and the Fiesta sedan didn't really stack up against them.
Quote:
Originally Posted by achyutaghosh View Post
2. The crazy pricing revisions

3. Not understanding consumer demand for variants that led to long wait times.
On the pricing, every manufacturer does this. Look at Nissan. Their Magnite pricing increased almost every quarter, since it launched and this is the only one car selling in their portfolio. Sometimes, I feel they are killing their golden goose, by their pricing strategy.

On the Fiesta 2 fiasco, I seriously cannot understand what Ford had in its mind. If they cannot make a competent sedan against Honda City, then just don't do it, to add one more laggard to your portfolio.

Long wait times are killing Tata at present I feel. Tiago wait times are too long, many of them go for Hyundai or Maruti. Sometimes I doubt whether these wait times are real.

Quote:
Originally Posted by sandeepmohan View Post
I don't believe Ford India tried hard enough. In over 20 years, they had launched and sold just 7 models! This is terrible. It does puzzle me why the updated Figo (Or Aspire) did not do well. There was nothing wrong with it. Several models from their International portfolio were missing. Cars that should have been launched. The Focus, updated Fiesta, Kuga, Puma, Escape, S Max (mpv), Endura, Mondeo. Where were all these cars and why were they never even considered for our market? Cause we want cheap? This no longer holds. Give us a good product and we will buy them.
I too have this confusion in mind. Ford is not a new kid in the block. How come any of their management or design teams think of competent cars for Indian consumers?

Quote:
Originally Posted by sandeepmohan View Post
It failed every year. There is no part warranty either. This was known to fail and they did nothing about it in 10 years of producing the car. If you are a responsible manufacturer, you will fix it, use different materials when a said part is known to fail.
Very true. But I see this complacency in a lot of manufacturers. Only people in manufacturing industry can clarify, whether it is so difficult to introduce such a change in the assembly line quickly. For an issue with VW part we have to wait two years, for a change in that part, that fixed the original issue.

I am really confused on who gives ideas or strategies to manufacturers like Ford. They have answers in consumer's mind. They did a wonderful job with Ecosport. I used to tell my friends in early 90s that India needs small SUV type of vehicles, as our road infrastructure will take at least 50 years to improve. Ecosport was an answer, 2 decades later from this manufacturer. Now everywhere we see compact SUVs and they rule our roads. So to understand customer sentiments they took 2 decades.

I feel the top 10 needs of majority people in a car are (not in order),
  1. Decent space to accommodate 5 or more people depending on segment in adequate comfort (read as seating quality)
  2. Decent engine performance that a regular commute or a long tour doesn't feel sluggish or boring or time-taking
  3. Decent ride quality to manage a comfortable drive on our bad roads and decent handling so that one can maneuver the car as you want without any discomfort to the passengers or any risk to car and people
  4. Decent NVH so that you know you are in a car and not in a tractor
  5. Fun and easy to drive mechanics
  6. Adequate safety to ensure lives or limbs are not lost in an accident
  7. Decent looks, though subjective
  8. Trouble free ownership experience (reliability) and niggle free service experience
  9. Adequate features and quality of material (manufacturers should understand Indian's still consider a car as luxury and not a commodity/utility) - no matter what, the car should look premium even if its a 3 or 4 lakh car - cheap bucket plastics or cutting down on safety features are a strict-no-no.
  10. Value for money - upfront cost and running cost (TCO) that is inline with buying capacity of the targeted audience - most customers should always feel that they have got more than what they paid for!
If manufacturer's like Ford cannot understand this, then its no brainer why they cannot sustain in a market like India. And we all know most manufacturers cannot meet all 10 of these and we are left with hunting for which offers more per paisa. But unfortunately an average Indian car buyer, lacks the awareness required, in buying a car and they tend to compromise on ones, that they should not.
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Old 14th November 2022, 17:58   #42
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Re: The rise and fall of Ford India | The most comprehensive study

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Originally Posted by Crank View Post
And we all know most manufacturers cannot meet all 10 of these and we are left with hunting for which offers more per paisa. But unfortunately an average Indian car buyer, lacks the awareness required, in buying a car and they tend to compromise on ones, that they should not.
The average Indian car buyer is smart, car manufacturers are not.

Buying a product that costs most people several year`s worth of their earnings means they need to have some element of trust towards the brand that is selling it to them - or - the value proposition is so strong that customer is willing to take a seemingly small risk - MG Hector for instance.

We have not seen any major problems with the brand overall or their vehicles, considering the numbers that they sell - that too to an ultra urban, social media equipped clientele.

Treating the average indian buyer without respect is the biggest mistake many OEMs do. If you analyze the failed experiments in our market without brand bias, you will get your answers.
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Old 14th November 2022, 18:34   #43
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Re: The rise and fall of Ford India | The most comprehensive study

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Originally Posted by Kosfactor View Post
The average Indian car buyer is smart, car manufacturers are not.

.
I would like to disagree. Take the example of Hyundai & Kia, they are smart enough to sell unsafe cars to Indians, that too for a fat profit. We are not smart enough to understand the reality, getting lured by the blings they offer.
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Old 14th November 2022, 18:44   #44
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Re: The rise and fall of Ford India | The most comprehensive study

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Originally Posted by Kosfactor View Post
The average Indian car buyer is smart, car manufacturers are not.

Treating the average indian buyer without respect is the biggest mistake many OEMs do. If you analyze the failed experiments in our market without brand bias, you will get your answers.
IMHO, Average Indian buyer still has fuel economy and "features" in their mind when the go for a buying decision. That is the reason for several unsafe cars are on our road. We all know NCAP is proving that safety is not just having airbags, ABS etc., but also in totality how people in the car retain their life and limb, in form, after an accident. But an average Indian buys a 2-star rated car and drives it at high speeds in the highway without understanding the risk he is putting himself and other passengers. All that nice "features" are not going to save them. My friend went with a Korean car just because it had the "features" he wanted. We all know sales charts of such manufacturers top the list in our country. Not many people know about ride & handling or cornering ability or high-speed stability or steering feedback. They think these are reserved for enthusiasts.

So I feel, there is only a small population who knows how and what to prioritize in a car buying decision.
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Old 23rd October 2023, 22:19   #45
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Re: The rise and fall of Ford India | The most comprehensive study

Post exit, Ford India makes Rs 505 crore profits in FY23 by selling engines and exports.

Quote:
The Co. sold 17,219 cars and 177,864 engines during FY23 as compared to 69,223 cars and 82,067 engines in the prior financial year, a decrease of 75% toward vehicles and an increase of 117% towards engines.
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