The automobile industry is in an all-time high market. Even a small innovation can bring lucrative business. In the same way, a minor mistake can diminish the whole company. The best example is Ford’s Failure in India.
The world’s fifth-largest car-maker company Ford is existing in India due to huge losses. The big player cannot win the race because of a lack of market research.
Ford cars have not made any kind of revolution in India so far. Ford Ecosport is a expemtion. The release of Ecosport brings a breakthrough for the company.
But still, Ford company was unable to bring new models at regular intervals. As Ford company has huge losses of around $2 billion.
The automobile industry of India is worth of $30 billion in markets. So, there are massive opportunities to set a brand in India. Even the competition is also at great heights.
Successful car companies Maruthi Suzuki and Hyundai were successful in capturing the majority of the market share. Even new entrant KIA is also gaining momentum every day. But Ford Company completely submerge in the Indian car market space.
Ford Failure: Failing to understand the Indian market
India is the country where the people interset is completely different from the others countries. Any company has to customize its product according to the need of people. Then only it can sustain and grow in Indian markets.
Ford company primarily did not understand the Indian market. Even the company did not pay attention to the needs of the consumer. Moreover, Ford car makers consider the Indian market as a standby player.
Initially, Ford Figo did not gain a large audience. Because of its unappealing design and engineering. Ford Company did not make any market research before launching Figo. It hardly aims to produce a car model.
But the Ford Figo is a huge Failure and suffered a great setback. Ford completely fail to understand the concept of a small car model. It was a time where the small car concept was in demand.
Hyundai car company understood the market really well and launch its model “Santro“. It was a massive success for the company. Then it was able to set a trademark in the Indian market.
Even Ford Escort its first brand in India suffers a failure in the Indian market. Because of its bad design and market analysis.
In India, consumers have different perspectives and styles while purchasing a car. The majority of the Indians purchase cars of their mileage, low cost, and Resale value.
But Ford Company did not realize the behavior of Indian consumers. So, the Ford only emphasis on the car size and its engine power. The overall cost of the cost was high comparatively.
Ultimately, lack of Market research is the reason for Ford Failure in India.
Also Read: Meehsho Success story
Ford Failure: High Competition
There is massive competition in the automobile sector in India. So, it is difficult to sustain and grow in the Indian market.
Even though India is a Profitable automobile market. Many automobile companies shut down its operation.
The primary reason for the failure is high competition and lack of market research. Even such companies won’t products to comforts level of India consumers.
Ford is the third foreign company to shut down its operation in India. General Motors and Harley Davidson are the other two companies that left the Indian Market.
Harley Davidson was a very costly brand to buy. So, the majority of Indians couldn’t able afford to buy the product. As a result, low sales and demand lead to the failure of Harley Davidson.
The leading leaders are Maruthi Suzuki and Hyundai in India. Ford did not even reach the standard of these companies. All the models of Ford did not attract Indian consumers. Here are some of the models of Ford’s
Only Ford Ecosport had high volumes of sales. But soon others companies launched better versions like Hyundai’s Creta and Suzuki’s Vitera Brezza.
Ford’s Shrinking Market Share in India
Ford company market shares value is just 0.5%. It had never gone up to two figures.
Even the Corona pandemic still worsen the scenario. As the nation’s whole lockdown, unemployment growth and slow economy made the automobile sector weaker.
Due to pandemic from 4 million in 2019-20 reduces up to 3 million units sales in 2020-21. So, it was very tough for the Ford company to tackle the market.
On the other hand, Maruthi Suzuki Shares value raise to 21.6% in FY21. In FY15 Suzuki Shares value just 12.4%.
Even Hyundai motors’ share value jumps to 20.2% in FY21. It was a massive increase in growth wherein FY15 it had merely shares value of 0.3%.
However, Ford company shares value was just 1.1% in the Indian market.
Ford Failure: Pricings
An average middle-class people buy a car around 5 to 7 lakhs of the pricing range. Even Pricing patterns are very sensitive in the Indian market. If it is more then the company has to incur losses in the future.
So it is essential to check and cautiously keep the price for the cars. But Ford company had failed to keep the pricing according to the Indian standards. Ford did not sell any cars between 4 to 8 lakhs of the price range.
As a result, the consumer did not go to purchase Ford company cars. The pricing model is another reason for Ford failure in India.
On contrary, Maruthi Suzuki focuses on giving budget cars to Indian consumers. This company had nearly 15 cars ranging to the Indian pricing standards. So, it had captured the majority of the Market. Maruthi Suzuki had a market share of 48%.
Even Hyundai emphasis consumers according to their comforts. This company attractive offers and the best EMI’s to its customers. Even it had almost 8 cars below 8 lakhs.
After all the flaws in the design system and wrong analysis of the Indian Market. Other factors led to its failures
- Ford cars have expensive servicing costs. This made its customers burn their cash more.
- Due to the low market share value and also low demand in the market. Its resale value is declining to a larger extent.
- Even the Spares of Ford company is expensive.
These are some of the factors that led to the failure of ford Company. India is a very sensitive market. Because there only fewer people prefer to buy a car.
In India for every 1000 only 42 people has a car. So, it is very difficult to convince Indian consumers to purchase a car. Whereas in the US purchasing ratio is for every 1000 people 800 and in china, for every 1000 people it is 206.
In this way, Ford is all set to quiet India. Even it is stopping its production in the Sanand plant in Gujarat by the 4th quarter of 2021. Besides another plant in Chennai, it planned to stop production by the 2nd quarter of 2022.
Moreover, 4000 employees will be jobless after ford’s Exit. So, ultimately it is adding to the unemployment rate in India. Even the Ford company incurs losses of up to 15,000 crores.
The companies do not understand the Indian market is the main reason for Ford Failure in India.
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