Why Did Ford Fail in India

9/12/24, 4:25 PM Why did Ford fail in India?.
Why did Ford fail in India?. Quality wasn’t the problem but failing… | by SURYASH KUMAR | ILLUMINATION | Medium
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Why did Ford fail in India?

Quality wasn’t the problem but failing to read the market was
SURYASH KUMAR · Follow

Published in ILLUMINATION · 5 min read · Feb 18, 2022
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9/12/24, 4:25 PM Why did Ford fail in India?. Quality wasn’t the problem but failing… | by SURYASH KUMAR | ILLUMINATION | Medium
Photo by Dan Smedley on Unsplash
Last year, Ford exited the Indian market; General Motors left the Indian
market in 2017. American carmakers keep failing in India, but why do they
fail? Both G.M and Ford, at one time, had great prospects in the Indian
market, but they couldn’t capitalise on the starts they got.
Indian consumers loved Chevrolet Cruze, Ford Ecosport, but most buyers
stayed away from the American brand.
I remember watching Maruti Suzuki’s — the most successful car

manufacturer in India — advertisement; the advertisement was set in a
NASA museum, and a scientist explains how a rocket works. At the end of the
explanation, the scientist is looking forward to questions, and an Indian

asks, “Kitna deti hai”, translated into English, “What’s the mileage?”
This sums up Suzuki’s approach, affordable cars, great mileage and

inexpensive maintenance.
Where did Ford go wrong?
Looking at India with an American lens

When in India, do as the Indians do. Ford forgot this and launched models
that weren’t completely customised for India. India is a right-hand drive,
unlike the U.S., but Ford continued placing switches in Indian cars the same
way as it did in U.S cars.
I was driving a ford, and I yanked the switch that was right to the steering
column because I was turning right, but the wipers got active. I cursed Ford;
I yanked the switch that was left to the steering column to turn on the right
indicator. But I enjoyed driving the car.
As this article puts it, “Some of the Ford India’s car models, the owner-driver, had
to get down, go around the vehicle, open the left side door to unlock the boot,
certainly a tedious affair.”
“Their initial attitude towards the Indian market was something like this — you
ate the pizza and burger that were launched. So, drive the model we offer. But the
pizza and burger companies Indianised their products while the American
carmakers didn’t do that,” the expert said
Sure the Indians loved the burgers, but they loved them because it was
customised for India. Globally, McDonald’s Big Mac beefburger is their star
product, but if they had launched it in India, they would have left India faster
than they came. They offered Indians a product that befitted the Indian culture:
Chicken Maharajah. Indians just love royalty and chicken.
Chose power not mileage

Ford looked at India with the American lens; they looked confused when the
media asked about their cars’ mileage because they focused on engine
power. And I have driven a Ford, and I can vouch for the quality and power,
but most Indians prefer mileage over power.
Initially, small cars were absent from Ford and GM’s global car portfolio,
while Maruti and Hyundai continued to capture market share by launching
small cars. Small cars have been the sweet spot for Manufacturers in the
Indian market, but Ford and GM ignored it.
Photo by Topique SL on Unsplash
One-model company and wrong investment move

Ford India has been largely a one model company; the company’s one model
did well while other models managed to find a few customers. Further,
Ford’s decision to invest in a greenfield project in Sanand wasn’t a wise
move. Even as there was a huge capacity at its Chennai Plant, Ford India
spent about $ 1 billion to set up a plant in Sanand, Gujarat.
“Without expanding the Chennai plant capacity by 30 per cent, investing in a

greenfield facility at a huge investment was a wrong strategy. A company runs
into loss not only due to lack of sales but also due to its investment decisions,” V.G.
Ramakrishnan, Managing Partner, Avanteum Advisors LLP told IANS.
In the financial year 2018–19, Ford just sold 93,000 units and captured 2.75%
of the market. After two decades, those figures raised questions on Ford’s
Indian prospects.
Indians love low cost

Anyone, who has any idea about the Indian market, knows Indians love low-
cost, whether it’s mobile tariffs or cars. The cheapest cars do best in India,
and the popular cheapest cars come from Asian manufacturers, not U.S
manufacturers.
Indians have limited disposable income and can’t afford a passenger vehicle
price of more than 5 lakhs rupees ($6,800). That explains why just 15% of the
automobiles sold in India are passenger vehicles, and the rest 85% are
scooters or motorbikes.
The cheapest passenger car Maruti offers in India starts at 3.15 lakh rupees,
while Ford’s equivalent starts at more than 5 lakh rupees.
Poor network of service centers

Ford also failed on another front: a network of service centres. Indian
consumers prioritise good after-sale service. Maruti has 3,500 service
stations, Hyundai has 1300 service centres, Kia, in its short two years,
managed to build 125 service centres, but Ford, even after two decades, had
308 service centres pan India.
The straw that broke Ford’s back

Ford’s last attempt to survive in India was a joint venture with Mahindra and
Mahindra
SearchLtd. If the joint venture had come through, Ford and Mahindra Write
would have launched 7 SUV’s. The joint venture would have saved the
company’s capital, design and development cost, but the joint venture was
smothered even before its birth.
And this was the straw that broke the camel’s back. Ford had so desperately
wanted the joint venture, and when the joint venture fell apart, it didn’t have
a plan B. Ford had no alternative; it just couldn’t survive solo because it
hadn’t launched any new models in the recent past, and it couldn’t survive
the brutal Indian market with the ageing models.
Ford offered quality products, but that wasn’t enough to capture the Indian
Market. Ford failed to offer Indian specific cars or cars that weren’t priced
higher than its competitors. And even if Ford offered cars at a higher price, it
didn’t offer enough features to justify the cost as Hyundai has been doing.
Ford forgot the adage: When in India, do as the Indians do. I hope Ford
someday returns to the Indian market with an Indian specific strategy.
Ford Cars Maruti American Manufacturing Mileage
Written by SURYASH KUMAR Follow
273 Followers · Writer for ILLUMINATION
I share my perspective through my writing to which you may disagree. You can contact me
at coolsuryash@gmail.com
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9/12/24, 4:25 PM Why did Ford fail in India?.

Why did Ford fail in India?

SURYASH KUMAR · Follow

Photo by Dan Smedley on Unsplash

I remember watching Maruti Suzuki’s — the most successful car

explanation, the scientist is looking forward to questions, and an Indian

This sums up Suzuki’s approach, affordable cars, great mileage and

Where did Ford go wrong?

Looking at India with an American lens

Chose power not mileage

Photo by Topique SL on Unsplash

One-model company and wrong investment move

“Without expanding the Chennai plant capacity by 30 per cent, investing in a

Indians love low cost

Poor network of service centers

The straw that broke Ford’s back

Ford Cars Maruti American Manufacturing Mileage

Written by SURYASH KUMAR Follow

273 Followers · Writer for ILLUMINATION

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