Goodbyes are hard. Especially when you have to bid adieu after sustaining a $2 billion loss. That’s right, American giant Ford Motors decided to shut down its Indian manufacturing units. Ouch, that must hurt 😥
But what can we say, the Indian automobile space is a hard nut to crack. Many have tried over the years, but only a few have been able to decipher the secret code to success. And as it turns out, Ford is not one of them.
So what went wrong? Why did Ford run out of fuel in the Indian market? Ride along!
Where did they go wrong? 🤔
Before getting down to analysing Ford’s failure in India, let us give you some context. Ford Motors entered the Indian market in 1995. They had set up two plants in India, one in Tamil Nadu and the other in Gujarat and they employed over 4000 workers directly. However, after having sustained significant losses in the country, they have decided to call it quits. The reasons behind the losses? Let’s dig in…🔭
Indian Market is a hard nut to crack👉 We Indians love a good bargain and that extends to our cars too. The price and mileage of a car are the key determinants for most Indians when it comes to buying a car. Performance?…ummm.. Maybe not so much. Ford took some time to understand this. It viewed the Indian market from a global, rather American prism which didn’t fit quite right with our desi requirements. We mean c’mon even McDonalds had to launch McAaloo Tikki burger in India. Let’s take an example. Ford’s cheapest car in India is around the range of INR 5 lacs which, let’s be honest is not that cheap for many.
We love Options👉 When have we ever gone into a shop and bought the first thing that we saw? Never, right? That is because we Indians thrive on variety. Ford was a little slow when it came to rolling out newer models. Ford’s Ikon was truly an iconic car, but it solely focussed on it for far too long while its competitors were rolling out one model after the other. Later Ford came up with models like Ecosport, Fusion, Figo, freestyle and more. But by that time, they were already a little too behind this rat, we mean car race 😅
The Indian Automobile Market and pandemic 👉 Even before the pandemic, the Indian Automobile industry wasn’t performing great. While the two-wheeler sector is still comparatively faring better, the four-wheeler sectors? Not so much. Is it because Indian youths are preferring to use cab services like Ola and Uber? Guess we will never know 😅The pandemic further aggravated the situation. Not only were car retail units shut for many months, people were not in a position to afford cars either.
Taking notes from the ones who cracked the code- Maruti and Hyundai😎
Okay, let us clear out one thing first, the Indian passenger car market is around $30 billion. This means it has enough offer to the ones who can crack it For most Indians, car is a luxury than a necessity. And our priorities are mostly price and mileage. Maruti and Hyundai were able to crack this code and they heavily focussed on building compact and affordable cars with superior designs for the Indian market.
They made optimal use of the existing supply chain and logistics to keep their costs low. Also, they didn’t forget to focus on building enough service centres across the country to ensure hassle-free service to their customers.
Ford was preceded by GM motors and Harley Davidson when it came to exiting India and all of them had one lesson to teach. We Indians like it our way.
What’s up this week?
Petroleum products to come under GST?-Crazy Tax Story
The government is contemplating bringing some petroleum products within the ambit of GST💰
Will this reduce the price of these products? 🤔
How will the state governments react to this?
We will have to wait and watch🔭
💭 Byte of The Day
A factory completely run by women?🤔
That’s what we talking about 💪
Ola is planning on building the world’s biggest women-only factory🛵
Can’t wait for this to pan out😎