December 15, 2012: Michael Boneham, President and MD, Ford India
The president and MD of Ford India retired recently. During his India innings, he oversaw the launch of the Figo and laid the ground for Ford’s next product, the EcoSport SUV. In this interview with Brian de Souza, he speaks about his India story.
Five-and-a-half years in India. What would you say are the key highlights of your tenure at Ford?
When I moved to India five-and-a-half years ago, we recognised that 70 percent of Ford’s growth by 2020 will come from the Asia-Pacific and Africa region with China and India as key players driving this growth. It was critical for Ford as a multinational corporation to move from an interesting niche player in India to a volume player. It was challenging for me and the team to get to understand the pulse of the customers, the economy, and get the confidence of our board to invest in a market where we have not been previously successful. I drew my confidence from the One Ford, One Team and One Plan strategy, and I was convinced that like other markets globally for Ford, the strategy will also work in India. With 70 percent of all cars sold in India in the B or sub-B segment with highly competitive margins, India is the most competitive automobile market in the world. Hence we had to unlearn and learn starting from research; product development, frugal engineering, and delivering material costs that enabled us to deliver a price position that met the expectations of the Indian customers.
With the Figo, Ford has been able to write a truly outstanding innings in India. What lessons/insights has Ford derived from the Figo experience and would potentially apply to upcoming launches in the future?
We were listening to the customers’ needs and were building products and offering services that they truly wanted and valued. We achieved that with the Figo which truly proved to be a game-changer for Ford in India, and worldwide. Today, when I see the 235,000 proud Figo customers, I know the team has been successful. The Figo was a launching pad for Ford India to go further – with a $1 billion of further investment in India, launch of eight new products by mid-decade, growing of our sales and service outlets to meet growing customer base, and ensuring profitability and long-term sustainability for Ford in India. We will continue to offer Indian customers with products that offer great ‘Value’ with their offer of high quality, smart features, efficient powertrain options and segment-leading safety.
Everyone (nearly at least) complains about India’s roads that leave much to be desired. But apart from better roads, what are the other challenges that India faces as our automotive sector develops?
Global economic volatility, rising interest rates and fuel prices have affected the Indian auto sector’s growth in the short-midterm. The automotive industry today expects slower growth compared to last year. One cannot always have a linear growth and the level of 30 percent that we saw last year is unsustainable.We will see immense growth potential from this market in the long term and we still expect that five million vehicles will be sold by 2015, and nine million by 2020. We are in India for the long haul as we are confident in India’s potential for tremendous growth in the coming years, such cyclical trends notwithstanding, and will continue to invest.The current economic slowdown has also seen a shift in consumer sentiment. However, we believe in India’s potential as an engine of growth and are convinced that these changes are cyclical. Our investment of over $ 2 billion in our operations in India and our plans to bring in eight new products by mid-decade reinforce our commitment to continued operations in India with the aim of profitable growth for all our stakeholders.
During your India tenure, did you meet any interesting people whether from the auto or not who may have influenced your thoughts or said something interesting that you will take back with you. . . even perhaps a Ford customer?
India reminds me of Europe in one country with its diverse languages, cultures, cuisines, landscapes – all in one. In India, it is not just about the purchasing experience, it is also about cost of ownership and value for money. I have been trying to get to know India, understand its complexities and diversity, but I haven’t understood it yet. No one can, really. It’s been a tremendous journey. I think the consumers here want great value for money. They don’t want cheap. There is a fundamental difference between the two. They will pay for what they see value for money. That is an equation you have to keep right here in India. Cost of ownership is absolutely critical. It’s not just purchase price, it’s the lifetime experience with the vehicle that the India consumer looks for, which is far more than any other consumer globally. They are actually trend-leading in this one. My firm view is that if you can be successful here in the small-car segment, you can be successful anywhere in the world.
Outside of work, what would you say were your most memorable India experiences?
The diversity one finds in India is amazing. There is just so much to see and learn. Besides, as an Australian, I do share something in common with virtually all Indians – our love for cricket.
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