The Indian automotive market boasts a plethora of options, making it a battleground for car manufacturers. While some brands like Hyundai and Maruti Suzuki have thrived, Ford faced considerable challenges in India. In this article, we’ll delve into the reasons behind failure of Ford as a brand in India.
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1. Lack of Value for Money (VFM) Cars
Ford made its Indian debut in 1995 with the Ford Escort, but this model failed to gain traction due to its relatively high price tag. At the time, the Indian market primarily comprised middle-class families who favored affordable and reliable options like the Maruti 800. Ford’s Escort did not fit into the entry-level car category, revealing a lack of market research.
2. Product Range and Updates
While the Figo hatchback initially found success for its quality and performance, subsequent models like the Figo Aspire and Freestyle struggled due to becoming outdated and lacking features. Ford’s decision to reduce features during the transition to BS6 emission norms was unpopular. The absence of the Sync 3 system in Aspire and Freestyle further hindered their competitiveness. The Endeavour also faced challenges due to offering only a 2-liter diesel engine post-BS6, paling in comparison to it’s legendary 3.2 TDCI engine.
3. Insufficient Focus on SUVs
As the Indian market shifted towards SUVs, Ford’s Ecosport initially led the sub-compact SUV segment. However, it lost ground to competitors like the Kia Sonet, Maruti Brezza, Mahindra XUV300, and Hyundai Venue, which offered more compelling features and updates. Ford’s failure to keep the Ecosport competitive contributed to its decline.
4. Sanand Plant Investment
Ford invested heavily in the Sanand Plant, diverting resources from product development and marketing. This financial mismanagement hindered their ability to introduce innovative products and adapt to market changes. Sanand plant later on became a disaster for Ford which Tata Motors brought at a later stage.
5. Lack of a Niche Market Focus
While Mahindra capitalized on premium and powerful SUVs like the ScorpioN and XUV700, Ford failed to identify a niche market. Models like the Fiesta struggled due to pricing and a diminishing preference for sedans among Indian consumers. Ford should have targeted niche audiences to boost sales.
6. Failed Joint Venture with Mahindra
Ford’s partnership with Mahindra aimed to save on research and development costs. However, the venture faltered due to differing ideologies and priorities, ultimately leading to its termination in India. This was one of the reason for failure of Ford as a brand in India.
7. Lack of Service Centres and dealerships
In India, Ford established a widespread network of dealerships and service centers, a presence primarily concentrated in developed Tier 1 and Tier 2 cities. However, this extensive reach was not uniformly spread across all states and smaller cities, which posed a challenge for the brand. Unlike competitors like Maruti Suzuki, which boasts service centers throughout the country, Ford’s limited presence in certain regions resulted in comparatively lower sales in India.
Ford’s struggles in the Indian market can be attributed to various factors, including the lack of value-for-money offerings, outdated product ranges, insufficient focus on SUVs, financial mismanagement, a failure to identify niche markets, and a terminated joint venture. Learning from these challenges is crucial for any automaker seeking success in India’s highly competitive automotive landscape.