U.S. automaker Ford is fast transforming to a volume player from being a niche player in the Indian market. After tasting success with the hatchback, Figo, and compact SUV, EcoSport, Ford is preparing to launch more products.
It is also gearing up to start, by end 2014, its second India car plant in Gujarat, which will more than double its car and engine capacity.
Nigel Harris, who took charge as President, Ford India, about six weeks ago, will have the task of managing and growing the integrated manufacturing operation of Ford India to serve domestic and export needs.
In his first interview to any media, Mr. Harris spoke to The Hindu about the market potential, products and cost-competitive initiatives, among others.
Excerpts:
How concerned are you about the current instability in the Indian market?
India is one of the fastest growing markets for automobiles with sales projected to grow to seven million units by 2020. By then, India would have become the world’s third-largest automotive market behind the United States and China. What we are seeing at present is a relatively shallow decline. But the good thing about emerging markets is that when they turn around and grow, they grow fast! We stay on course to our One Ford Plan — match supply with demand, and ensure we continue to invest in our future by offering products and services that customers want.
Is there any change in your product roll-out plan in view of the emerging competitive landscape in Indian passenger car market?
As part of our business decision-making process, we constantly evaluate our plans, the macro-economic factors and how they impact our business and we are committed to bring the right product at the right time.
Our focus is now on the heart of the Indian automobile market. Ford wants to be where its customers are and deliver great products that they want.
The B-segment (compact sedans and hatchbacks) is the most competitive segment in India and has been outpacing the industry for the past decade, accounting for almost a third of total sales in 2013. Ford expects the B-segment sales to grow from about a million units last year to roughly two million units by 2018, reflecting the significance of compact cars to Indian consumers. We have witnessed unprecedented success with our game changer Ford Figo and the urban SUV Ford EcoSport. The Ford Figo Concept which was unveiled recently has received great feedback from auto enthusiasts and reiterates our intent to focus on the B-segment.
Is Ford India making reasonable progress in capturing market share from Japanese competitors?
At the Delhi Auto Expo, we illustrated how our product-led transformation will solidify our position in the Indian market.
Alongside the global unveiling of the Ford Figo Concept, which is aimed at redefining customer expectations in the B segment, we showcased our 2014 line-up of the latest models to be available for India, including the 2014 Ford Fiesta and 2014 Ford Endeavour.
The display was to convey Ford’s focus on meeting the needs of Indian consumers and the company’s commitment to establishing itself as a significant player in the Indian market. More recently, we launched the 2014 Ford Classic at new, attractive price points, with an aim to provide an enhanced value proposition to discerning customers. We also launched the 2014 Ford Figo, taking in-car technology and connectivity to a new high, with a host of enhanced industry leading features, including the first-in-class Wi-Fi. We are strongly positioned to contribute to the growth of India’s automobile industry, which is expected to reach seven million vehicles by 2020.
Ford is still perceived as an expensive brand vis-à-vis Asian brands. What is your response?
My experience has taught me that customers don’t just buy a vehicle; they are buying into an experience and a relationship with the Blue Oval. We are in the people business and building an environment of trust and transparency within Ford India, our dealers and ultimately our customers are vital.
Ford’s Cost of Ownership vision is three-pronged and focuses on enhancing the ownership experience via use of efficient technology and parts design, service innovations and network expansion. And it is through this that we are fast breaking the myths associated with the costs of owning a Ford car.
Our efforts towards reducing the cost of ownership, is an intensive and continuous process and we are putting all our weight behind meeting customers’ service expectations and enhancing the brand and ownership experience.
With a focus of growing closer to our customers across India, we are expanding our dealer network in the country, including in Tier 2-4 locations. We have also set a new benchmark in the Indian automotive service segment with our newest initiative, “Happy Pocket Service” which will ensure a comprehensive, transparent service at a pre-fixed, competitive cost.
We also provide parts at sub-assembly levels for repairs, which enable a substantial saving in the overall ownership costs by breaking up an assembly into sub-components. Whenever a car part needs to be replaced, this initiative enables replacing the impacted sub-assembly or component as opposed to replacing the complete part.
The Has the EcoSport lost its initial momentum in the local market? Is there any capacity constraint ?
Consumers are appreciating the great value-for-money proposition that we are offering in the EcoSport’s compelling smart package and the unabated response for the product has been extremely gratifying. The present waiting period for the EcoSport varies from three months to six months depending on the variants and locations.
The team at our Chennai facility is working closely with suppliers to enhance output of the EcoSport to reduce the waiting period and to meet the high demand. We are now identifying the customers who have been waiting for long period and try to prioritise the supplies. Our order bank since launch has been 60,000, and we have already delivered more than 40,000 units of EcoSport.
Exports account for a major part of your production from the Chennai plant. Would you want to elaborate on your strategy here?
We are well on course to establish India as our export hub and a centre of excellence for small cars and low displacement engines for the domestic and export markets. Alongside domestic sales opportunities, Ford is utilising its India facilities to export to several global markets, thereby becoming advocates of India’s manufacturing prowess. Moreover, exports are important for us as it gives us the currency hedge. In our overall strategy, key part is to emerge as a big player in the domestic market, but also to be an exporter of quality cars from India.
What is the growth outlook for Ford India in 2014 and what will be your key focus areas during this calendar year?
Having maintained a sustained performance over the last year, we have begun this year on a positive note and look forward to rest of 2014 with cautious optimism as we continue to remain focussed on our long-term goals. We showcased our product-led-transformation at the Auto Expo, followed by the 2014 Ford Classic and 2014 Ford Figo launches. We also took significant steps towards enhancing the customer brand experience by increasing our reach to 304 sales and service facilities across 164 cities in India and launched our Happy Pocket Service. Our belief in the long-term growth opportunity in India remains unchanged. We stay on course to our One Ford Plan — match supply with demand, and ensure we continue to invest in our future by offering products and services that our customers want and value.
balachandar.g@thehindu.co.in
