‘Ford India will never be a one-car company again.’
Nigel Harris, president and MD of Ford India, speaks to Shobha Mathur on the new Figo Aspire compact sedan, domestic and export market growth strategy, and the upcoming new Figo hatchback and Endeavour SUV.
Nigel Harris, president and MD of Ford India, speaks to Shobha Mathur on the recently-launched Figo Aspire compact sedan, domestic and export market growth strategy, and introducing the new Figo hatchback and Endeavour SUV.
Will the new Figo Aspire be the lifeline for Ford’s sagging sales in India?
Yes, absolutely! I defy anybody to drive the Figo Aspire and then say it is not 15-20 percent better in driving. It is actually a better car and you have to look at its technical specifications to understand. The Figo Aspire’s sales will depend on demand but again Ford’s new car is pitched in the heart of the market. The new-generation Figo will be coming before Diwali and is going to be stunning. The Endeavour SUV will come early next year.
How will Ford drive its growth strategy in India this fiscal?
India is not growing at the rate we think it should grow but having said that, India will be the third largest automotive market globally. Clearly, we need to get a stronger foothold in the market.
When you come into India and fight for market share, it is very difficult. Different things happened with Ford globally that put us back. However, what we are doing now is setting up a domestic market and dovetailing into a very strong export programme that really drives us. That means we can get the products that are right for India and can position it at the right price. When you have small volumes and your investment is high, if you build 100,000 units your costs are high. So if you can get the scale and price for the volumes it kind of balances out.
The EcoSport was pitched as a game-changer model for Ford in India. Sales took off initially but have been on the decline of late. In April-July 2015, Ford India has seen a fall in domestic sales of over 32 percent across all models. What is the turnaround plan?
You can’t overreact to that. When a product reaches the end of its cycle, it loses appeal on price because so many of India’s customers are first-time buyers. Also let’s face it, the Figo is ageing and everyone knew that we had a new product coming. We had announced it in March at the inauguration of our Sanand plant in Gujarat when we revealed this product.
The compact EcoSport SUV has been going strong with sales of 4,000 units per month. We have not spent any discount money on it since its launch over two years ago now. Now when demand is not so robust, it brings supply down as well. So we eventually allowed it to come down to match supply to demand. From this month onwards, you will see substantial growth.
But the EcoSport continues to have a waiting period?
Initially yes there were long waiting periods but now some of the vehicles are taking longer for delivery. For instance, some of the petrol derivatives are still facing a little bit of waiting but generally we are meeting the demand for the EcoSport. We will be able to meet demand on the Aspire as well.
Everyone talks about Ford being one car company. The EcoSport was the first of the ‘One Ford Plan’ product while the existing Figo was developed just for India as was the Fiesta Classic was done just for India, so it is really hard to sustain a vehicle just for India.
The Aspire, new Figo, Endeavour and EcoSport are global cars with global styles for India and for exports. So Ford India will never be a one-car company again.
What are the current bookings for the Figo Aspire?
We have just had over a million people to look at the Aspire and 4 million people look at the video. We have got 100,000 people saying when the product comes tell us, and we are taking thousands of enquiries every day.
How soon will we see Ford notch a firm ranking in the automotive market in India?
I would love to get to be among the top 5 players. It would be a good start and who knows what will happen after that. But India will be a hotly competed market as everyone wants a piece of the Indian market pie, so getting 1, 2, 3 points of its share will not be easy. It depends on which models you are selling in India; a model like the Figo Aspire needs high volumes to get economies of scale.
Between the new Figo and the Aspire, the production capacity for domestic and exports is 240,000 units at Sanand and probably that is the scale to get the right piece price to drive the cost. For a product like the Endeavour, which is a more expensive vehicle, there is more margin sometimes so the scale is a bit different. The Aspire is a new car involving high investments so it will take some time to pay back. When you bring on a new product, then you might have a high degree of commonality that customers tend to see; this brings your volumes down and makes the whole business equation lower.
Exports have put Ford India on the growth path. What is the roadmap for export of engines and vehicles especially as the new plant’s proximity to the Mundra Port in Gujarat can now be leveraged?
On the export front we are doing well. The production capacity is 240,000 units at Sanand and we are planning to export too. Exports start this week to 8 countries so it will be pretty exciting. But the first part of the focus is India which is very important. The Ford Figo hatch in South America is doing sensationally well and is the same car that we will launch in a couple of months here. So I anticipate the export demand to be strong as well for it.
We are running 50 jobs per hour at Sanand and will be two shifts by the end of the year that can be further ramped up to three shifts, so it is pretty flexible in terms of what we can do. Initially we take more in exports of the Aspire and as we build through to the middle of next year it will be 50:50 but it will be skewed towards our customers.
We are planning domestic sales and exports to be 50:50 but it all depends as the world is pretty fluid but we have a good manufacturing footprint here.
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