Formatted Ford - 100 Marks Project 1

8/3/2019 Formatted Ford - 100 Marks Project 1

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EXECUTIVE SUMMARY

The Indian passenger car industry is growing rapidly due to the entry of car

companies from all over the world in India. Car companies have eyed India as a

potential market for sales due to growing purchasing power among the India

masses. Also India is a developing country with lot of potential for companies to

invest. It is one the largest market in the world. This is evident by the entry of

various world class automobile companies entering the country.

Ford India Limited is a subsidiary of Ford Motor Company, USA. Established in

1995, Ford India is headquartered in Maraimalai Nagar near Chennai.

Currently there are over 20 car companies in the Indian car market, with many

more planning their entry.

The company has been undertaking good market strategies to sell its cars, and also

attracting the attention of potential buyers through effective advertisements on

television, newspapers, auto magazines and other forms of media.

The company paid more importance to the newly developed DURA technology

currently used in the Ford Fiesta which is a world-class revolutionary petrol and

diesel engine technology patented by Ford.

Lastly the project is an effort to analyze, the automobile industry as in India with

special emphasis on Ford India.

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INDIAN BACKGROUND FOR PASSENGER CARS

The passenger car industry in India grew at a nominal CAGR (Compound Annual

Growth Rate) of approximately 3.6% during the 1960s and the 1970s. Sales of

passenger cars were limited by supply. There were only two manufacturers in the

market, Hindustan Motors and Premier Automobiles, and they had limited

production capacities. The import of passenger cars was restricted to the State

Trading Corporation (STC) and foreign diplomats. There were quantitative

restrictions on imports. The rate of customs duty levied on cars was 225%.

Since, 1991 opening of the economy has changed the face of auto industry. Today,

it is amongst the main drivers of growth of Indian economy with an output

multiplier of 2.24(for every Re.1 invested, auto sector gives back Rs.2.24 to the

economy.

In recent years we have seen increasing number of global players entering Indian

market by way of Joint ventures, collaborations or wholly owned subsidiary. Sudden

interest of major global players has made Indian auto industry very competitive as

India provides twin benefit of ready market and Low cost manufacturing base forthem.

Moreover, the liberalization steps, such as, relaxation of the foreign exchange and

equity regulations, reduction of tariffs on imports, and refining the banking policies,

initiated by the Government of India, have played an equally important role in

bringing the Indian Automotive industry to great heights. It is estimated that the

sale of passenger cars have tripled compared to their sale in the last five years.

Thus, the sale of cars has reached a figure of 1 million users and is expected to

increase further. Its also to be noted that the demand for luxurious models, SUVs,

and mini-cars for family owners, have shot up, largely due to increase in the

consumers buying capacity.

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Indian Automobile sector is high on growth trajectory. Based on estimates, the total

sales (domestic + exports) for FY06 will touch 10 million marks of which

Commercial Vehicle Segment will contribute maximum. According to auto industry

experts Indian Automobile sales will grow at a CAGR of 9.5% to 13008 million by

2010 from current 8.45 million units in FY05. To tap this large opportunity, IndianAutomobile companies and global automotive giants have announced huge

expansion plans

Implications of Global Trends for the Indian Passenger Car Market

The Indian automotive industry has flourished like never before in the recent years.

This extra-ordinary growth that the Indian automotive industry has witnessed, is a

result of a two major factors namely, the improvement in the living standards of

the middle class, and an increase in their disposable incomes.

The increased demand for Indian automobiles has resulted in a large number of

multi-national auto companies, especially from Japan, U. S. A., and Europe,

entering the Indian market and working in collaboration with the Indian firms. Also,

the institutionalization of automobile finance has further paved the way to sustain a

long-term high growth for the industry.

As a result of rising household income and decline in interest rates, along with

current low passengers car ownership density, many global manufactures have

entered the Indian market. According to the central statistical organization, India

had a GDP growth rate of 6.1 %, 4.4% and 5.6%in fiscal 2000, and 2001 and2002,

respectively. India is generally believed to have high GDP growth potential aided by

low cost of production and availability of skilled man power. The high rate of growth

in the sales of passengers cars in India is driven primarily by growth in the sales of

passenger cars priced below Rs.5 lakhs which constituted over 84% of total sales

volumes in fiscal 2003

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HISTORY OF FORD

The Dream Becomes a Business

Ford Motor Company entered the business world on June 16, 1903, when Henry

Ford and 11 business associates signed the company's articles of incorporation.

With $28,000 in cash, the pioneering industrialists gave birth to what was to

become one of the world's largest corporations. Few companies are as closely

identified with the history and development of industry and society throughout the

20th century as Ford Motor Company.

As with most great enterprises, Ford Motor Company's beginnings were modest.

The company had anxious moments in its infancy. The earliest record of a shipment

is July 20, 1903, approximately one month after incorporation, to a Detroit

physician. With the company's first sale came hopea young Ford Motor Company

had taken its first steps.

Mass Production on the Line

Perhaps Ford Motor Company's single greatest contribution to automotive

manufacturing was the moving assembly line. First implemented at the Highland

Park plant (in Michigan, US) in 1913, the new technique allowed individual workers

to stay in one place and perform the same task repeatedly on multiple vehicles that

passed by them. The line proved tremendously efficient, helping the company far

surpass the production levels of their competitorsand making the vehicles more

affordable.

The First Vehicles

Henry Ford insisted that the company's future lay in the production of affordable

cars for a mass market. Beginning in 1903, the company began using the first 19

letters of the alphabet to name new cars. In 1908, the Model T was born. 19 years

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and 15 million Model T's later, Ford Motor Company was a giant industrial complex

that spanned the globe. In 1925, Ford Motor Company acquired the Lincoln Motor

Company, thus branching out into luxury cars, and in the 1930's, the Mercury

division was created to establish a division centered on mid-priced cars. Ford Motor

Company was growing.

Becoming a Global Company

In the 50's came the Thunderbird and the chance to own a part of Ford Motor

Company. The company went public and, on Feb. 24, 1956, had about 350,000 new

stockholders. Henry Ford Seconds ( IIs) keen perception of political and economic

trends in the 50's led to the global expansion of FMC in the 60's, and the

establishment of Ford of Europe in 1967, 20 years ahead of the European EconomicCommunity's arrival. The company established its North American Automotive

Operations in 1971, consolidating U.S., Canadian, and Mexican operations more

than two decades ahead of the North American Free Trade Agreement.

Ford Motor Company started the last century with a single man envisioning

products that would meet the needs of people in a world on the verge of high-gear

industrialization. Today, Ford Motor Company is a family of automotive brands

consisting of: Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover, Aston Martin, and

Volvo. The company is beginning its second century of existence with a worldwide

organization that retains and expands Henry Ford's heritage by developing products

that serve the varying and ever-changing needs of people in the global community.

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THE FORD FAMILY

Ford Mercury

Mazda Volvo

Jaguar Land Rover

Lincoln Aston Martin

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CURRENT SCENARIO

Ford Motor Co. plans to cut up to 30,000 jobs and shutter 14 plants in a sweeping

restructuring that the nation's second biggest automaker hopes will tackle declining

market share and rising costs that led to hefty losses in its North American

operations.

Ford shares rose on, indicating some investors were pleased with the long-awaited

"Way Forward" plan as well as the company's larger-than-expected $124 million

overall profit in the fourth quarter. Union leaders called the planned cuts "extremely

disappointing."

Ford shares rose 42 cents, or 5.3 percent, to close at $8.32 on the New York Stock

Exchange.

Ford said the plan will restore profitability by 2008. But some analysts said the plan

was short on details, leaving them uncertain if it would boost Ford profits as the

company struggles with aggressive competition, higher gasoline prices, rising costsfor labor and raw materials and a junk credit rating. Ford named only five of the

plants it plans to close.

"It's a step forward in the culture of Ford. Whether it translates into increased

profits remains to be seen," said Brian Johnson, an auto analyst with Sanford

Bernstein.

The cuts represent up to 25 percent of Ford's North American work force of 122,000

people. Ford has approximately 87,000 hourly workers and 35,000 salaried

workers. In addition, Ford plans to cut 12 percent of its corporate officers in the

next two months.

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Ford's St. Louis plant will be the first plant idled, in the first quarter of this year. A

plant near Atlanta will close at the end of this year and a plant in Wixom, Mich., will

close in the second quarter of 2007, according to Ford Americas President Mark

Fields, the architect of the plan.

Other plants to be idled and eventually closed through 2008 are Batavia

Transmission in Ohio and Windsor Casting in Ontario. Ford will choose later this

year two more plants to be idled. The company also will reduce production to one

shift at its St. Thomas assembly plant in Ontario. All of the plant closings and job

cuts are scheduled to be completed by 2012.

"These cuts are a painful last resort, and I'm deeply mindful of their impact,"

Chairman and Chief Executive Bill Ford said in announcing the cuts. "In the long run

we will create far more stable and secure jobs. We all have to change and we all

have to sacrifice, but I believe this is the path to winning."

In addition to the facilities named Monday, analysts also have predicted assembly

plants in St. Paul, Minn., and Cuatitlan, Mexico could be at risk for closure because

of the products they make.

Under the company's existing contract with the United Auto Workers, workers at

the idled plants will continue to get most of their pay and benefits until a new

contract is negotiated next year.

Ford also plans to build one plant in North America.

UAW President Ron Gettelfinger and Vice President Gerald Bantom expressed

disappointment over the plan.

"The impacted hourly and salaried workers find themselves facing uncertain futures

because of senior management's failure to halt Ford's sliding market share," they

said in a statement. "The announcement has further left a cloud hanging over the

entire work force because of pending future announcements of additional facilities

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to be closed at some point in the future."

The pair said Ford should be trying to gain market share, rather than aligning

production capacity with shrinking demand for the company's vehicles.

Fields said Ford's North American plants have been operating at about three-

quarters of their full capacity.

"That is clearly unsustainable," Fields said. He said Ford's actions will reduce

assembly capacity by 1.2 million vehicles, or 26 percent, by the end of 2008.

In addition to the job cuts, Ford said it plans to achieve $6 billion in material cost

savings by 2010 as part of its restructuring. It also plans to revitalize its Ford,

Mercury and Lincoln brands by giving them more distinct identities and relying less

heavily on costly incentives.

Earlier , Ford reported earnings of $2 billion in 2005, down 42 percent from last

year's profit of $3.5 billion. It was the third straight year the automaker has

reported a profit, but gains in Europe, Asia and elsewhere were offset by a loss of

$1.6 billion in North American operations.

The latest results included a 19 percent increase in its overall profit to $124 million,

or 8 cents a share, in the fourth quarter thanks to the sale of its Hertz Corp. rental

division and improved profits for its luxury brands. That was despite a loss of $143

million in its North American operations, an improvement from a loss of $470

million the same period a year ago.

Ford said it would no longer provide earnings guidance beginning in 2006.

"We can't succeed in the long run if we're focused only on the short term," Bill Ford

said.

Ford Chief Financial Officer Don LeClair said employee buyouts and other elements

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of the restructuring plan could cost the automaker around $500 million this year.

Fields said half the jobs Ford is cutting will be through attrition, while the rest will

be through layoffs. He said the company plans to help workers using buyouts and

possible placement in other plants.

In Wixom, 18-year veteran James Crawford said he is too young to retire and might

not have enough seniority to get hired at another plant.

"This really hits me hard," said the 39-year-old car painter, who listened to the

announcement on the radio in a white Ford Probe parked across the street from the

plant. "It looks like I'm starting over."

During the 2007 labor negotiations, Ford will almost certainly try to eliminate the

unparalleled job protection that lets hourly workers continue to collect wages and

benefits when there is no longer any work for them, said Gary Chaison, a professor

of industrial relations at Clark University. The UAW has vowed to keep those

protections in place.

"The announced plant closings and future announcements are the subject of

ongoing discussions with Ford," Gettelfinger and Bantom said. "Certainly, today's

announcement will only make the 2007 negotiations all the more difficult and all the

more important."

Ford and its larger rival, General Motors Corp., have been hurt by falling sales of

profitable sport utility vehicles, growing health care and materials costs and

restrictive labor contracts. GM announced a similar restructuring plan in November

that will shave its work force by 30,000 and close 12 North American facilities.

Ford also has seen its U.S. market share slide as a result of increasing competition

from foreign rivals. The company suffered its tenth straight year of market share

losses in the United States in 2005, and for the first time in 19 years, Ford lost its

crown as America's best-selling brand to GM's Chevrolet. Ford sold around 2.9

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million vehicles for a market share of 17.4 percent in 2005, down from 18.3 percent

the year before and 24 percent in 1990.

"It's a competitive shootout like we've never seen before," said Fields, who said the

number of vehicle nameplates in the U.S. market will reach 300 by the end of thedecade, up from 215 in 2002.

The restructuring is Ford's second in four years. Under the first plan, Ford closed

five plants and cut 35,000 jobs, but its North American operations failed to turn

around. Bill Ford said this plan makes far more dramatic changes, including

changing a stifling corporate culture and focusing more heavily on consumer

demands.

"We're going to be a big company that thinks like a small company," he

said.

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TIME LINE

1903 June 16 - Ford Motor Co. founded by Malcomson group; Model A

produced in rented Mack Ave. plant.1906 Ford overtakes Olds, Buick and Cadillac combined to become

Number One automaker in U.S., a position it holds for 20 years;

Henry Ford becomes company president and majority owner.1908 October - Introduction of legendary Ford Model T which puts the

world on wheels.1911 First overseas assembly plant in Manchester, England; Ford wins

Selden patent suit.1921 Five-millionth Ford built.1925 First pickup truck introduced; Production of Ford Tri-Motor

aircraft begins; Ford of Germany established.1933 Ford falls to third place after General Motors and Chrysler.1935 Introduction of 1936 Lincoln-Zephyr, Ford's first medium-priced

car.

1983 Introduction of Ranger-based 1984 Bronco II compact SUV1987 Ford acquires a majority of Aston Martin Lagonda, limited-

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1947 April 7 - Death of Henry Ford1951 Automatic transmission available in Ford products1966 Introduction of 1967 Mercury Cougar, a Mustang spin-off1967 Ford of Europe formed1976 Introduction of sub-compact front-wheel-drive Ford Fiesta in

Europe1980 Introduction of 1981-model Ford Escort "world car" built in North

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production British sports car manufacturer; Death of Henry Ford

II.1993 Introduction in Europe of Ford Mondeo mid-sized "world car"1996 Introduction of Aeromax heavy-duty truck; Two-hundred-fifty

millionth Ford vehicle built

1999 -Acquisition of Volvo Cars and TH!NK electric car; Introduction of

2000 Ford Excursion SUV based on Super Duty F-250

-Ford India was established and launches Ford Ikon.

-Ford will make small car

-Ford India plans 1.3-litre version of Ikon

-Ikon to be a precursor of things to come, says Nasser

-Is Escort on way out?

-Ford hires Dilip Chhabria to style its cars

-Ford launches Quality Care

-3 Ikon versions will be out in November2000 Ford announces record $7.2 billion earnings for 1999; Acquisition

of Land Rover from BMW.

2001 -Ford Mondeo was launched in India.

-Ford India launches Mondeo

-Ford conservation grants announced

-Fords Mondeo to cost Rs 16 lakh-Ford Mondeo set to overtake Mercedes

-Ford unveils new-look Ikon ZXi

2003 -Ford Endeavour was launched in India.

-Ford unveils Ikon NXT SXi

-Ford to launch Everest, Ranger

-Ford to buy $40-m components from Indian auto ancillaries

-Ford India plans to launch five new passenger vehicles this year

-Ford Mondeo, Bajaj Pulsar bag ICICI Bank Overdrive Awards2004 -Ford Fusion was launched in India.

-Ford positions Fusion as 'urban activity vehicle'

-Fusion comes conditioned for success

-Ford India launching special Ikon variant2005 -Ford Fiesta was launched in India.

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-The 1,00,000th Ford Ikon rolls out

-M&M, Ford India untangle holdings

-Ford launches new version of Mondeo2006 Ford India Launches all-new Fusion

FORD IN INDIA

Ford India Limited is a subsidiary of Ford Motor Company, USA. Established in

1995, Ford India is headquartered in Maraimalai Nagar near Chennai. Ford's

commitment to India is demonstrated through its present investment of Rs 1700

crore and has the capacity to manufacture over 50,000 vehicles per annum.

In October 1995, Ford and its joint venture partner, Mahindra & Mahindra (M&M),

received government approval to establish a joint venture company, Mahindra Ford

India Ltd (MFIL.) MFIL assembled and distributed Ford Escorts in India. Just ten

months after approval, the first Ford Escort rolled off the line at an existing M&M

facility in Nashik. In March of 1998, the equity pattern changed from 50:50 to

70:30 with Ford having the majority stake. The company was renamed Ford India.

With a steady increase of Fords investments, the equity level stands presently at

85:15. In 1999, Ford India inaugurated the fully integrated manufacturing facility in

Maraimalai Nagar and launched the IKON. The IKON is exported, in CKD

(completely knocked down kits) form, to other countries from India. Ford India

Limited (FIL) is catching up fast with the Indian consumer. Looks like FIL is all set

to conquer the Indian market like rest of the world.

Among the other initiatives launched by the company, it unveiled Ford Assured in

2000 to buy, recondition and sell various models of used cars. It introduced Quality

Care, a branded service initiative in India, the first country outside of the United

States to implement this initiative. Ford Credit has been set up to provide financial

solutions and services to consumers of Ford cars. The Ford Business Services

Center services the accounting requirements of Ford Motor Company globally.

Ford India

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Opened Ford Credit Kotak Mahindra Finance ltd. in November 1996 in

Mumbai

55% Ford Credit joint venture with Kotak Mahindra Finance (35%) and

M&M (10%)

Finances Ford vehicles through Ford India's distribution system

Opened Ford Business Services Center in November 1998, at Chennai

Commenced in 1999

Located in Maraimalai Nagar, Tamil Nadu

Local content currently over 90%

Ford will make small car

- 1 April 1999

Ford launches QualityCare

- 9 September 1999

Ikon to be a precursor of things to come, says Nasser

- 23 November 1999

No used car imports please

- 27 November 1999

Exports began in October 2000

Ford Mondeo set to overtake Mercedes

- 2 November 2001

Fords Mondeo to cost Rs 16 lakh

- 9 November 2001

Ford conservation grants announced

- 30 November 2001

Ford India launches Mondeo

- 17 December 2001

Ford India aims for 20% market share; January sales double

- 6 February 2003

Ford Mondeo, Bajaj Pulsar bag ICICI Bank Overdrive Awards

- 7 February 2003

Ford to buy $40-m components from Indian auto ancillaries

- 5 June 2003

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Ford to launch Everest, Ranger

- 4 July 2003

Ford India to make Q1 tag compulsory for vendors

- 3 February 2004

Ford Motor's new cars debut at Geneva Motor Show

- 5 March 2004

Fusion comes conditioned for success

- 1 September 2004

Ford, Hindustan Motors provide super-ambulances for NH45

- 29 March 2005

M&M, Ford India untangle holdings

- 1 April 2005

Arvind Mathew takes over as MD at Ford India

- 7 July 2005

New Fiesta from Ford India

- 29 September 2005

Ford launches retouched-up Ikon Flair

- 21 February 2006

Ford Motor Company to use IIT Chennai for emission R&D

- 16 March 2006

Ford gives the Endeavour a posh look

- 20 July 2006

Ford India Launches all-new Fusion

- 10 August 2006

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CURRENT KEY GLOBAL PLAYERS IN INDIA

The principal global car manufacturers who actively compete in the Indian market

are listed below:

Toyota Kirloskar Motors India Ltd. Maruti Udyog Ltd.

Fiat India Automobiles Pvt. Ltd. Opel Motors.

Honda Siel Cars India Ltd. Hyundai Motors India Ltd.

Daimler Chrysler India Pvt. Ltd Skoda Auto India Pvt. Ltd.

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Chevrolet Porsche

Mahindra and Mahindra Hindustan Motors

Tata Motors General Motors India Ltd.

San Motors Audi

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BMW Rolls Royce

Force Reva electric car

Lamborghini Nissan

Mitsubishi Daewoo

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CARS FOR INDIAN ROADS

Ford Endeavour

BrakesRear Self Adjusting DrumType Variable Power Assist

Fuel Tank capacity 0.71 L

EngineDisplacement 24.99 cc

No. cylinders /arrangement / Valves

4 cyl in-line,SOHC, 16V

PerformanceMax. Power 110PS/3500rpmMax. Torque 27.9kgm/2000rpm

Steering

TypeTubular Double Acting TypeComposite Oil/Gas Filled

Suspension

FrontIndependent Double Wishbonewith Torsion Bar Spring,

Stabiliser BarRear

Progressive Linear Rate LeafSprings with Low Friction Pads

Tyres & WheelsTyres 265/70 R15 (Tubeless)Tyres 5.5J x 15

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The key features of Ford Endeavour

Multi-reflector headlamps, clear lamps, large chrome grille, and bumper styling

2-wheel and 4-wheel drives and is powered by the 2.5L inter-cooled turbo dieengine

Petrol in an automatic - and a manual version

Dual control air-conditioning system comes with two additional sets of vents for rear seat

Individual cup-holders, creative storage room and front seat back map pockequipped with smaller cell-phone

Dual airbags for driver and passenger, individual seat belts in all seating position

Childproof rear door locks, and fuel tank shields

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Ford Fusion

Brakes

Front Ventilated DisksRear Self-Adjusting DrumsDimension & weight

Fuel tank capacity 45 litresFuel type Unleaded Petrol

EngineConstruction All AluminumDisplacement 1596ccEmission level Euro 3Fuel system SEFINo. cylinders /arrangement / Valves

4 cyl./ Inline

PerformanceFinal Drive Ratio 4.25 .Max. Power 101 at 6500rpmMax. Torque 146 at 3400rpmReverse Gear Ratio 3.66 .

Suspension

Front

"Independent MacPhersonStruts with ofset coilspring/damper units,dual pathbody mounts and stabiliser bar

Rear

Semi-independent twist-beam,

low package coil springs &twin-tube dampers.Shock Absorbers (Front& Rear)

Gas Filled

TransmissionTransmission type 5-speed manual

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The key features of Ford Fusion are

Signature 3-bar chrome grille with integrated "Ford" oval

Four wheel power assisted disc brakes and 16-inch wheels with all- season

Continental "ContiProContact" tires

AM/FM stereo with single CD/MP3 player with four speakers

Power door locks with remote keyless entry and power windows with driver's

door one-touch down function

Five-passenger seating with rear 60/40 spring-assisted fold-down seats

Air conditioning, speed control and tilt and telescoping steering wheel

Enhanced side impact intrusion protection system and Ford's exclusive

A top-of-the-line Fusion SEL adds fog lamps

Automatic temperature control

Upgraded wood or piano black interior trim and a leather wrapped steering

wheel with redundant audio and climate controls.

Optional 5-speed automatic transmission

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Ford Ikon

BrakesAntilock brake system n.aFront Disc 240 mmRear Drums 180 mm

Dimension & weightFront track 1429 mmFuel Tank capacity 45 litres

EngineBore x stroke 73.96 x 75.48 mmBrake Horse Power 70 PS @ 5500 RPMCompression ratio 10.2 : 1Construction SOHC with Aluminum Alloy headDisplacement 1299 ccFuel Type Petrol

Ignition SEFILayout

4 cylinder in line front, Transversemounted

Torque 105 Nm @ 2500 RPMValve gear 2 valves

Fuel consumptionCity 9.5kmplHighway 16.5kmplOverall 13.0kmpl

Power trainTransmission Manual 5 speedType Front wheel drive

Steering

Type Power assisted Rack & PinionSuspension

Front track McPherson strutsRear track Heavy duty twist beam system

The key features of the Ford IKON are

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Power steering

Power windows

Seat belts in the front and rear

Central locking

Electric fuel cap release

Electric boot release

Full wheel covers

Body-colored bumpers

Body-side protection molding

CFC-free air-conditioning

Euro II compliant

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Ford Mondeo

BrakesAntilock brake system AvailableFront Ventilated, Disc 300 mmRear Solid, Disc 280 mm

Dimension & weightFront track 1522 mmFuel Tank capacity 58.5 litres

EngineBore x stroke 87.5 x 83.1 mmBrake Horse Power 143 bhp@6000 rpmCompression ratio 10.8:1Construction Alluminium alloyDisplacement 1999 ccFuel Type PetrolIgnition Sequential Electronic fuel injection

Layout 4 cylinder in line, TransversemountedTorque 190 Nm@4500 rpmValve gear 4 valves per cylinder

Fuel consumptionOverall 9.7 kmpl.

Power trainTransmission Manual-5 speedType Front Wheel Drive

SteeringType Rack & Pinion, Power Assisted

Suspension

Front

Mcpherson strut with angled coil

spring/damper units & Antiroll bars

Rear

Independent quadralink systemwith strut type coil spring/dampersunit & Antiroll bars, 2 transverse &1 trailing arm with passive rearwheel steering

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The key features of Ford Mondeo are --

Body kit that includes a rear spoiler, side skirts, mesh grille and distinctive

front and rear bumper styling

Climate Control

CD player

Cruise control

ABS

Electric windows

HF Screen

P/d/mirrors

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Ford Fiesta

Ford launched the new Fiesta, a car slotted in the C segment that will compete with

likes of Chevrolet Optra and the Honda City. The good this is that there is a Diesel

option available and this car is actually made for India.

Right from the 13 engineers, who helped design and develop it at the Ford research

center in Melbourne, to the building of the first conformation prototype in

Chennai and mid-2004, the Fiesta was build keeping mostly Indians in mind.

There was also another thing that influenced the way the Fiesta was build lessons

learnt for the Ikon. When launched, the latter had cheap plastics, even cheaper

door trim, no internal boot release, no anti - rolled bar and just 1 reversing light.

No such mistakes with the Fiesta, which has all the basics in place. The Fiesta also

conforms to enhanced requirements, like an ability to wade through water better.It also has a dog bar behind the bumper designed to limit the damage caused by

small animals on our countrys unpredictable highways. The sharp, new edge

design that characterized Fords has been watered down and the Fiesta looks more

Asian than European. But, the large sweeping headlamps gleam with attitude and

give the Fiesta a certain presence.

The big grille with Fords typical diamond mesh design and the strong chin with a

wide air intake and circular fogs, again typically Ford, are the only aggressive bits

of styling in an otherwise tame shape. The rear is dominated by large, very

Mercedes tail lamps. The conventional looking boot lid cuts into the bumper for

better access into the trunk. Fords designers took care to avoid the high boot

design of the Ikon, which seriously hampered rear visibility. Other components

have also been designed specifically for India. The air-con system is all new and

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Ford is using a powerful 160cc scroll type compressor. The steering has been

refined, and special attention has been paid to reducing the steering effort at low

speeds. The upshot of narrower tyres is better fuel economy and in this case, Ford

has traded aesthetics for practicality. The 68bhp 1.4 DuraTorq TDCi (turbo direct

common rail injection) motor, developed jointly by Ford and PSA (Peugeot-Citoren),was refined. When idle, the DuraTorq engine is incredibly refined when warmed up,

with vibrations and noise levels lower that any other diesel vehicle.

Performance, similar to the Fusion is more that adequate. The 0 100 kms per

hour should be under 12 seconds, which will make it among the fastest cars in its

class. The Fiesta also achieves and optimum compromise between ride and

handling. The handling inspires confidence and low speed ride trumps the city many

times over. The same applies to the breaks, which backed by ABS; provide

progressive retardation, unlike the Ikon. Ford plans to launce the car by mid

November.

THE FORD FIESTA RECORDEDTHE LONGEST DISTANCE EVER TRAVELLED ON A

FULL TANK AT THE AUTO CAR MAX MILEAGE MARATHON. THE PETROL CAR

AVERAGED 22.43 KMPL, AND THE DIESEL CAR 31.48 KMPL. SETTING A WHOLE

NEW STANDARD OF FUEL EFFICIENCY DRIVEN BY DURA TECHNOLOGY.

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GETTING THE CUSTOMERS

International Ford model hunt comes to India

Ford believes that "India is a brand," and thats the main reason for bringing the

contest to India and it also thinks that the next supermodel will be from India.

The hunt began in the month of July and was spread across four major Indian cities

- Mumbai, New Delhi, Bangalore and Kolkata. Here the company would shortlist 15-

25 finalists who will participate in the national finals to be held in November.

The organizers are keeping strictly to international criterion: minimum height

required for participation is 175 cm. The only consideration for India has been to

raise the age cut-off. Around the world Ford is willing to look at girls from 14 years

but here, in keeping with local sentiments, they have brought up the age cut-off by

two years.

The finale of the Indian round would be held either in Mumbai or New Delhi.

The India winner will join representatives from 50 countries to compete for a

$250,000 modeling contract with Ford Models, which is associated with names like

Stephanie Seymour and Patricia Velasquez.

The agency has also discovered talents like Sharon Stone and Naomi Campbell.

The final model hunt will happen in New York in January next year, apart from the

winner, the first runner-up gets $150,000 and the second runner-up contracts

worth $100,000.

In a now famous quote, Eileen Ford once said: "You will never know where or when

you will find the next new model but you can bet that someone from Ford will be

looking."

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Vintage Car Rallies

In another of its promotional activities, Ford India Limited, in association with

Autocar India and Karnataka Vintage and Classic Car Club, had held the "Ford

Centenary Celebration Rally" on the 29th of June 2003, in Bangalore.

This anniversary was a celebration of ford and its accomplishments over the past

100 years. It's an opportunity to look forward with pride, by growing with new

products that stir passion," said David Friedman, Managing Director and President,

Ford India Limited.

The rally showcased - Model A Fords, Vintage Fords (1932-1939), Classic Fords

(1940-1959), WWII Classics (Jeeps and Special Vehicles), Modern Classics (1960-

1989), and the modern day Indian Fords (Ikon, Mondeo and Escort).

The rally was flagged-off from the Palace Grounds, Bangalore encompassed a

distance of approximately 25 kms for Vintage and Classic Fords cars and 70 kms for

Modern Ford cars on a predetermined route through the arterial roads of Bangalore.

The Vintage and Classic Fords was rated on a judging system as per their

class/category while the Modern Fords would compete in a time-speed-distance

(TSD) format Rally.

The Ford Centenary Celebration Rally will showcase Ford vehicles in India from

1915 onwards demonstrating a 100 years of ownership pride with Ford products in

India," said David Friedman.

Eat pizza and win a Ford Ikon

Ford India in association with Pizza Corner launched a campaign called "Eat A

Fortune" offering gifts to consumers. As per the offer, a person buying a combo

meal for Rs 170 (Rs 85 per head), consisting of one medium vegetarian pizza, two

glasses of Coke and pineapple banana fudge, will get a scratch card. By scratching

the card the consumer can win guaranteed gifts.

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In addition, there will also be weekly prizes consisting of mobile Phones. But the

bumper draw will be on May 30 wherein three Bumper prizes will be announced

consisting of Ford Ikon car for the winner. The combo meal could be purchased by

customers at the company's `dine-in' restaurants and delivery outlets across the

country and he/she would be applicable to the contest.

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Advertisements

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Ford effectively communicates to the consumer through its print advertisements,

which are placed strategically in leading magazines, newspapers and automated

hoardings. Also it has come up with television advertisements that communicate

not only about its products features, but also the luxury the car offers and what

people look for most in the car that they buy today, i.e. status.

Above were some of the print advertisements of Ford India.

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Ford Fusion Anthem Album

Hum to anything karega, duniya se nahin darega.

This is Ford India's anthem (based on the popular Kishore Kumar number Hum tomohabbat karega, duniya se nahin darega) for its recent launch, Ford Fusion.

As the title suggests, it claims to be able to do anything from negotiating the

busy city traffic to taking on the unfriendliest of terrains at ease.

Ford's research into consumers' habits and car usage patterns revealed that there

are a significant number of mature car consumers for whom the car is much more

than a means of transportation or a status symbol. It is a tool that lets them pack

more into their life, discover new places and share moments together.

One clear direction consumers vibed very well with was the thought of `a car that

never says no' whatever the need of the hour, whatever your desire, the car will

deliver. And the clear winner was the concept of Anything Karega,' which indicates

versatility; that makes it deliver to this family like no other vehicle can.

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BOSTON CONSULTANCY GROUP MATRIX

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Dogs

These are products, which have low market shares and low market growth rates.

The options for many companies is to phase these products out, however some

organization do go for the strategy of re-inventing and injecting new life into the

product.Ford Mondeo is in this stage of the BCG Matrix.

Question Mark/Problem Child

These are products with low market share but operate in high market growth rates.

The company puts a lot of resources in this product in the hope that it will

eventually increase market share and generate cash returns in the future.

Ford Endeavour is in this stage of the BCG matrix.

Star

Stars have high market shares that operate in growing markets. The product at

this stage should be generating positive returns for the company.

Ford India has no star product in this product mix as yet.

Cash Cow

Cash Cow are products at the mature stage of the lifecycle, they generate high

amounts of cash for the company, but growth rate is slowing. There are chances

that the product may slip into decline; appropriate marketing mix strategies should

be employed to try to prevent this from happening.

Ford Ikon is a cash cow for Ford India.

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PRODUCT LIFE CYCLE

The product life cycle of any product goes through the following four stages:

Introduction

The need for immediate profit is not a pressure. The product is promoted to create

awareness. If the product has no or few competitors, a skimming price strategy is

employed. Limited numbers of product are available in few channels of distribution.

Both Fusion and Fiesta are in this stage.

Growth

Competitors are attracted into the market with very similar offerings. Products

become more profitable and companies form alliances, joint ventures and take each

other over. Advertising spend is high and focuses upon building brand. Market

share tends to stabilize.

Maturity

Those products that survive the earlier stages tend to spend longest in this phase.

Sales grow at a decreasing rate and then stabilise. Producers attempt to

differentiate products and brands are key to this. Price wars and intense

competition occur. At this point the market reaches saturation. Producers begin to

leave the market due to poor margins. Promotion becomes more widespread and

use a greater variety of media. Ford Endeavour and Ikon are in this stage.

Decline

At this point there is a downturn in the market. For example more innovative

products are introduced or consumer tastes have changed. There is intense price-

cutting and many more products are withdrawn from the market. Profits can be

improved by reducing marketing spend and cost cutting. Ford Mondeo is in this

stage.

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1999 2000 2001 2002 2003 2004 2005

50000

45000

40000

35000

30000

25000

20000

15000

10000

5000

0

SALES

YEARS

Product Life Cycle of Ford India.


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PRODUCT INTRODUCTION MATRIX

Rapid Penetration

According to this matrix Ford uses Rapid Penetration strategy for the new Fiesta

and the Ikon models as the car is priced low, but the company undertakes high

promotion for the sale of the car.

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Slow Skimming

The company is using the Slow Skimming Strategy for the Mondeo and Endeavour

models as it is priced very high, but the promotion undertaken for the cars are verylow.

Rapid Skimming

In the case of the Fusion the company is using Rapid Skimming strategy, as the car

is priced high in its segment, at the same time the company uses a very high

promotion strategy.

Slow Penetration

Ford does not use Slow Penetration strategy for any of its cars as no Ford car has a

low promotion strategy and is priced comparatively lower to the other cars in its

segment.

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GENERAL ELECRTIC MODEL

43

Businessstrengths Weight Rating Total

Market Share 0.2 4 0.8

Product Quality 0.08 3 0.24

Brand Reputation 0.16 3 0.48

Distributionnetwork

0.06 2 0.12

Promotionaleffects

0.1 3 0.3

ProductionCapacity

0.08 3 0.24

Product

efficiency

0.06 2 0.12

R&Dperformance

0.10 2 0.2

ManagerialPersonnel

0.06 2 0.12

Styling 0.1 3 0.3

Total 1.00 2.92


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MarketAttractiveness

Weight Rating Total

Market size 0.17 3 0.51

Market growthRate

0.15 3 0.45

Profit margin 0.1 3 0.3

CompetitiveIntensity

0.2 4 0.8

Technologicalrequirements

0.15 2 0.3

Environmentalimpact

0.10 2 0.2

Socialresponsibility

0.13 2 0.26

Total 1 2.82

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Selectively / Manage for earnings

The above is the strategy for Ford India as the plotting comes in the Medium

Market Attractiveness and Medium Business Strength grid.

The strategy is to protect existing program and concentrate investments in

segments where profitability is good and risks are relatively low.

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S.W.O.T. ANALYSIS

Strength

1. Second Largest Automotive Company : Ford Motor Company (FMC) is the

worlds second largest automotive company after General Motors.

2. Awards : Ford ranked highest in the J.D. Power Asia Pacific 2003 Sales

Satisfaction India (SSI) survey. In the J.D. Power Asia Pacific 2002 India Initial

Quality Study (IQS) Study, Ford Ikon ranked the highest in the entry mid-size

segment as it did in 2001.

Ford India was awarded a trophy for the Top Exporter in 2001-02, and highest

export performance in 2002-03, both by the Engineering Export Promotion Council.

88

90

92

9496

98

100

102

104

106

108

Sales

Satisfaction

Level

Ford

Hyundai

MarutiAverage

Toyota

Tata

The J.D. Power Asia Pacific 2003 sales satisfaction survey

3. Wide product portfolio : To improve the appeal for its products and maintain

product differentiation, Ford introduced new products in various segments as well

as variants for existing products.

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4. High degree of localization : A high degree of localization has enabled Ford to

keep its manufacturing costs low. Ford Indias localization programme has crossed

the 90 per cent mark.

5. Maintaining quality and customer satisfaction : Ford India is a customer-centric company and has launched various promotion programmes to increase its

brand recall and customer satisfaction among Indian consumers.

6. Constant monitoring of its supplier base : Ford uses a monitoring system to

ensure that suppliers adhere to high quality standards and deliver shipments on

time. This gives it an assurance of the inventory management. Ford Indias

purchasing policy requires that all primary suppliers achieve TPM, TQM, ISO 9000,

ISO 14000, QS and TS 1649 certifications.

7. Excellence in manufacturing : Ford Indias facility is designed with a focus on

scalability and speedy expansion in the future. With a unique plant design of an

inverted E, the facility is capable of supporting volumes both for the domestic

and the export markets.

Weakness

1. Weak Distribution system : Ford India needs to improve its distribution

system as in the whole of Mumbai it has only 3 dealers and India has 82 dealer

outlets in 67 cities. Another problem, which is caused by a weak distribution

system, is that the company cannot reach out to the untapped markets, which are

mainly the smaller towns like Gwalior.

2. No car in the B segment : Another weakness of Ford is that currently in Indian

the company has no car to cater the needs of the B segment customers. As the B

segment comprises of a large number of customers Ford can get a boost in its sales

levels if it launches a good car in the segment.

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Opportunities

1. Leveraging Indias IT advantage : Ford can use the IT advantage India has

and can build a IT unit. This IT unit can caters to the software requirements of FordMotor Company in the region and around the world. For example, the IT unit can

develop a web-based customer relationship service for Ford India, Australia and

South Africa which can be of great benefit to the companies wide operations.

2. As a back office hub : Ford can also develop a unit which fulfills the accounting

requirements of Ford Motor company worldwide.

3. The A and B segment : Ford has a car for all segments except the A and the B

segment. The A and the B segments are great opportunities which can be tapped

by the company as the customer base is wide and there are ample opportunities for

the company to grow with developing a car for that segment.

4. Distribution system : By improving there current weak distribution system the

company can not only increase their accessibility but it can also help them tap the

untapped markets of the smaller towns in the countries, for example places such as

Gwalior and Allahabad. A stronger and better distribution system can also increase

the sales of the company by approximately 20 25 %.

Threats

1. The unauthorized market for spares and accessories is getting stronger :

In India the unauthorized spare parts and accessories market is getting stronger

because of the price factor and easy availability in the open market.

2. Reluctant passengers : Another area which can be a threat for the company is

that the Indian passengers are reluctant to try any thing new due to the loyalty and

security factor and would possibly not try the new Ford car models. This can lead to

big problems for the company such as low sales volumes etc.

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3. External factors : Demand for passenger cars can be affected by factors such

as an increase in fuel prices, macro- economic performance, and competition from

alternative modes of transport.

4. Competition :Competition is a threat to any company, which in the case of Fordwould be from companies like Toyota, Chevrolet, Daimler Chrysler, BMW, Skoda,

General Motors and other car companies having a strong global presence and are

rapidly entering the Indian market.

WHAT FORD CAN DO

Looking at the current marketing strategy we recommend the following for Ford to

become a leader no only in the sales context but also with respect to the market

share value :

The A and B Segment

Ford should shift their focus to the B segment, where there exist lot of potential

buyers who want first time small cars. Ford is not new to this market, as Ford has

been producing small cars internationally that are very successful internationally.

Price Factor

Reduce price, and produce cars of lower versions to cater to the middle-income

group, which form a large part of the Indian population.

Incentives

Ford should provide better and competitive incentives for their dealersalong withbenefits on the paid up stock. They should give a competing edge to the dealers so

the can compete among themselves for better sales.

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Distribution

By improving there current weak distribution system the company can not only

increase their accessibility but it can also help them tap the untapped markets of

the smaller towns in the countries. A stronger and better distribution system canalso increase the sales of the company by approximately 20 25 %.

Service Station

The number of Ford service stations should be increased along with a high level of

promotion of their service stations so that they could be recognized. Each of the

service stations of the Ford should be at appropriate distance on highways, which is

already being implemented in competition with Maruti.

Spares

As the penetration level of Ford is not very good in India in the rural sector the

availability of spares is difficult so the company should concentrate more on the

rural sector. The cost of the spares is also costly than some of its competitors.

Products

Ford should introduce new and better variants in the markets in various segments

to give the customer added reason to purchase a Ford car. Othe car companies are

also undertaking a similar path and thus it will be highly important for Ford to

undertake this activity to be competent enough in the market.

Warranty

Ford should extend the warranty period for its cars as this would give a competitive

advantage and also encourage people to give the brand Ford and added thought or

a priority while making the purchase decision.

After Sales Service

Ford should look at providing valuable after sales service to its customers, through

the means of hassle free insurance covers, easy and quick on the road registration

procedures and on call response to customers needs etc.

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Social Responsibility

Ford should look at providing environment friendly and social friendly business

solutions. These can be in the form of environment friendly factories, sustainable

development practices, fair and equal treatment to all sectors of the society. Thiswill help Ford create an image of trust, loyalty and concern in the society which can

act in its favor.

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ROAD MAP TO THE FUTURE

Investments

Days after Ford Motor chairman and CEO Bill Ford promised fresh investments for

India, the company said it would be pumping in $75 million (around Rs 330 crore)

for expanding operations.

To support the aggressive growth strategy, Ford India will be augmenting its

subscribed capital. Ford India has received approval from Ford Motor company for

an additional equity infusion of $75 million to meet the needs of our future plans.

Ford India, which has its plant near Chennai, has invested around $375 million in

India so far. The company began operations in 1996 in a joint venture with

Mahindra and Mahindra and became a fully owned subsidiary in 2005.

Bill Ford, on his maiden visit to the country, had promised further investments in

the market. "This market (India) is critical to our plans for building a Ford Motor Co

for the 21st century,"

Ford India currently sells four models in India, including the flagship 'Ikon', SUV

'Endeavour', premium sedan 'Mondeo' and the recently launched 'Fusion'.

Hybrid and Concept Cars

US auto giant Ford expects to have five hybrid gasoline-electric vehicles on the

market within three years. Its only one of the fuel efficient technologies Ford are

working seriously on, Fords commitment is clear they are planning to be a leader in

bringing their customers with technologies that makes a difference in their life and

in their world. Ford was the first US automaker to introduce a hybrid vehicle, the

Escape sport utility vehicle that runs on either its gasoline engine or on its electric

motor depending on driving conditions, and incorporates regenerative braking

technology, which funnels energy generated from the brakes into the battery.

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Ford said more hybrids are coming from the company, including new versions of its

Mercury Mariner compact SUV later this year a Mazda Tribute by next year, and

hybrid versions of its new sedans, the Ford Fusion and Mercury Milan by 2008.

According to Mr. Ford, his great-grandfather's vision was to provide affordable

transportation for the world and he wants to expand that vision for the 21st century

and provide transportation that is affordable in every sense of the word, socially

and environmentally, as well as economically. That means vehicles that are safe,

clear and energy efficient.

Concept cars play an important role in the automobile industry. These exercises are

great opportunities to test potential designs. Originally, these were pure

explorations in style, but over time the ideas have developed into a combination ofexploration and show. Sometimes the original intention to explore design themes

has been taken over by the public relations crew, so the result is an attempt to

impress the car-buying public, the press, the executive suite, and, just perhaps,

rival designers at competitive companies, which especially means designers of

different models within the same company.

Fords plans to develop on the ideas of Concept Cars and build a suitable customer

base for them.

Exports and Production Capacity

Ford India now plans to increase exports from its Indian manufacturing plant. The

company also plans to double its production capacity in India to reach a target of

100,000 cars a year and simultaneously expand the distribution network across the

country. Ford India today has the capacity to manufacture 65000 vehicles perannum.

Ford India exported 28,000 units of Ford Ikon in completely knocked down (CKD)

form to South Africa, Mexico and Brazil in 2003. Ford has also exported Ford Ikon

components worth over US$ 10 million per annum to China since 2002.

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NEWSPAPER ARTICLES

NEWSPAPER: The Economic Times

HEADLINE: Ford's Q3 losses mount to $5.8bn

DATE: October 2006

DEARBORN: Struggling US auto giant Ford Motor posted a mammoth third-

quarter net loss of $5.8bn as restructuring costs hammered its earnings.

Ford also revealed it would restate results from 01 through to this years third

quarter, to correct the accounting for certain derivative transactions by itsconsumer credit division.

Fords newly-appointed chief executive, former Boeing executive Alan Mulally,

said the results were clearly unacceptable and vowed to make more of the

smaller, fuel-efficient vehicles pioneered by Japanese automakers. Mulally, in an

interview, ruled out an alliance with Renault-Nissan in the near term.

The Ford CEO was quoted as saying that such a partnership would send Ford in

the wrong direction as it would distract the company from its restructuring

plan. Mulally said he has had no contact with Renault-Nissan CEO Carlos Ghosn

but Ford could consider alliance talks in the future but right now I like our

focus.

His comments came in the wake of Renault-Nissans collapsed alliance talks

with General Motors earlier this month. After that collapse, the French and

Japanese partners said they were open to an alliance with another North

American partner.

Fords loss for the third quarter ended September 30 included heavy provisions

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for its hard-hitting restructuring plan, which foresees 16 plant closures in North

America and the elimination of 45,000 jobs by 08.

Excluding those provisions, its loss came to $1.2 bn, compared to $191m before

exceptional items a year earlier. That translated into a loss of 62 cents per

share, a penny more than Wall Streets average forecast of 61 cents.

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HEADLINE: Ford may drive Mazda into the small car market

DATE: September 2006

MUMBAI: Ford Motor may make its debut in the small car market through its

Japanese subsidiary Mazda Motor. Though Ford has remained tightlipped on its

plans for the sub-Rs 5 lakh car market, sources in the know say that Ford has

roped in Mazda to aid its foray into the segment.

Though it is not known what model the two companies will choose to launch in

India, industry sources say the two companies are jointly developing a car for India

which will be based on an existing Mazda platform and will be manufactured in

Ford's Maraimalainagar plant.

When contacted Ford India president and managing director Arvind Mathew said,

The Indian auto market is growing rapidly, and the Ford Motor continues to

explore all opportunities for growth. However, we have no firm plans at this time."

Mazda Motor which manufactures over 1.25 million vehicles a year and sells them

in Japan, Europe and North America is no stranger to the Indian market.

The company has been a long-time partner of Punjab Tractors in its Swaraj Mazda

venture for manufacturing light commercial vehicles. The 10-year technical

agreement between the two companies came to an end in October 2004, and

Mazda opted out of the JV in August 2005 selling its stake to Sumitomo

Corporation.

At the time of exiting the JV, Mazda said its focus had shifted from commercial

vehicle to cars so it had no option but to sell out. "Mazda has been preparing to

enter the car market for some time now and discarding the CV maker image was

the first step in that direction.

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The company is likely to make a backdoor entry as Ford already has an established

presence in India and is a much stronger brand in the market," said an industry

analyst. Ford has a 33.4% stake in Mazda. The two companies entered into a

strategic relationship to enhance each others competitive strength through

marketing and distribution alliances and 'badge engineering' rebadging onemodel of a car as another.

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HEADLINE: Fiesta time for Ford

DATE: August 2006

CHENNAI: Ford India continues to have faith in big cars, as it has done so far here

in India. Even though it is working on all options by keenly watching the

developments in each segment, it is clearly prioritising them as per the market

requirements.

The company is also enthused by the market response to its latest offering, the

diesel Exi variant of the Fiesta, launched in July, with a price tag under Rs 7 lakh.

We keep an eye on developments in all segments and have action plans worked

out for each one of them. However, we prioritise these plans based on market

requirements, Arvind Mathew, president and managing director, Ford India told ET.

Mr Mathew said each of the Ford models launched in India is based on market

requirements. Be it the Ikon an entry level sedan, the urban-utility vehicle Fusion, the high-end Mondeo, the SUV Endeavour or the Fiesta, which was

specifically designed and launched first in India.

These products are the most suited for India and Indian conditions, including the

roads. And we will always keep our models relevant for customers, Mr Mathew

said.

According to him, the Fusion continues to do well and notches up sales of about

300 units a month in big markets like Delhi and Mumbai, besides Kolkata and

Guwahati. We are sure the market exists for this segment and it will grow faster in

the future, Mr Mathew pointed out.

Ford India seems to be having a busy year. In the first seven months of 07, it has

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sold 26,775 vehicles, including 3,019 units in July. The plant is operating around

the 55,000-60,000 units per annum level. It is working constantly on the

localisation programme for Fiesta.

When we launched Ikon, it had local content around the 75% level and weincreased it gradually to well over 90% now. A similar trend can be seen for Fiesta

too and the programme is on target, he observed.

Meanwhile, the company is enthused by the response for its latest launch, the

diesel Exi variant of Fiesta, priced at Rs 6.85 lakh (ex-showroom Delhi). It has

opened a new market for us and we were able to breach the sub-Rs 7 lakh barrier

to reach out to more customers.

However, it is still early and we have to observe over the next couple of months to

study its success, Scott McCormack, the companys new vice-president

marketing, sales and service said.

He said there is a definite trend in the Indian market towards diesel. Two factors

high fuel prices and the new hybrid diesel engines that compete with petrol variants

on performance and are less noisy. While Ford India sources its petrol engines from

within India, it imports the diesel engines from Europe.

Mr Scott has also drawn up a slew of priorities for the Indian market. These include

introducing more products, which are right for the local market, growing the sales

and service network and enhancing the reputation of the primary brand the Blue

Oval.

Other priorities include further enhancing the ownership experience to improve

customer satisfaction and build the talent competencies of individuals within a

team.

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HEADLINE: Toyota, Ford get moving with small car plans

DATE: May 2006

MUMBAI: The big guns of the auto industry have, after their initial reluctance,

realised the small car is a money-spinner they cannot miss out on. Ford and Toyota

have decided to roll out India-specific models that will race with rivals in a segment

of the market they had deemed cluttered not long ago.

Toyota, which had plans to introduce a small car from subsidiary Daihatsu, will

develop a new model, exclusively for India. Previous discussions between the two

had failed because of disagreements on price sharing, sources said.

The debut, earlier planned for August 07, has been pushed back to late 08. It will

be a B+ segment car, with a price tag of Rs 5-5.5 lakh, but dealers are insisting

that the range be set at Rs 3.5-Rs 4.5 lakh, the sources added.

Ford India, another company that carries its premium-car-maker cache with

pride, is revving up to take on Japanese and Korean rivals, whose small cars have

driven profits. The US giant had stayed off this segment, saying it was

overcrowded.

The small-car segment has witnessed frenzied growth after the excise duty cut in

the budget and the launch of Swift. If the growth momentum continues for the next

few months, we will firm up our decision on the small car, Arvind Mathew,

president and MD of Ford India, told ET.

Asked if an existing model from sister brands such as Mazda would be brought in,

Mr Mathew said, It will be a car exclusively developed for the Indian market.

General Motors, which had delayed the small car because it did not have enough

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capacity, has decided to start producing the model at its Halol plant in Gujarat. The

production will later be shifted to another location where the global auto giant

intends to set up a greenfield facility.

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NEWSPAPER: Mumbai-Mirror

HEADLINE: Fiesta pricing may hurt

DATE: November 2005

New Delhi: Its Fiesta times ahead for car buyers who want to buy a mid-size

sedan and for those who wish to upgrade to the luxury segment, thanks to Ford

India which has introduced Fiesta with a competitive price tag.

But the pricing may not be good for the US car major itself which is keen to play

the volumes game in India with its latest offering. The competitive pricing of Fiesta

may get customers in large numbers but at the cost of its own siblings Ikon and

Fusion which also come within the same price bracket.

Besides the entry level 1.4 litre petrol version Fiesta at Rs 5.59 lakh (ex-

showroom), Fiestas other two petrol variants 1.6 litre ZXi and SXi models are

priced at Rs 6.29 lakh and 6.89 lakh, respectively. Its 1.4 litre common rail diesel

variant sports a price tag of Rs 6.99 lakh.

Entry level sedan Ikon and urban activity vehicle Fusion are priced at Rs 4.97 lakh

and 6.23 lakh, respectively.

We do not think that the aggressive pricing of Fiesta will hit the sales of Ikon and

Fusion as the three are positioned on different platforms with distinct features. It

will expand the market for mid-size sedans and contribute to the continuing growth

of the segment, Ford India Vice-President (Marketing and Sales) MV

Sivaramakrishnan told Mumbai Mirror.

In India, the car buying pattern is based on prices, space and fuel economy and not

on positioning, auto expert Rajiv Mitra said. Such close pricing always affects sales

of vehicles coming under the same price range and segment, he said

Asked what the company will do if Fiesta eats into the share of Ikon - the hugely

popular Ford model though its sales have been dwindling over the past few months

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Sivaramakrishnan said the company will continue to produce Ikon on demand.

Fiesta pricing may trigger a price war in the sedan segment and force Maruti

(Esteem Rs 4.42-Rs 5.07 lakh) and Baleno (Rs 5.80-Rs 6.62 lakh), Hyundai (Accent

Rs 5.29-7.14 lakh) General Motor (Optra Rs 8-10 lakh) and Honda (City models Rs6.71-7.99 lakh) to revise their prices.

Recently, car-makers increased prices of their vehicles due to rising input costs.

Hyundai India Executive Director (Sales and Marketing) WS Min admitted that such

pricing will hit the sales of vehicles in the sedan category.

Initially, people go by novelty factor and they prefer the new car over the existing

models in the same segment. It affects sales but ultimately performance counts,

Min said, clarifying that Hyundai will not go for any price corrections because of the

Fiesta pricing.

Abhishek Bachchan to endorse Fiesta

Company sources have revealed that Ford India has signed Bollywoods latest super

star Abhishek Bachchan to endorse its mid-sized sedan Fiesta. It has also been

reliably learnt that Abhishek has given about 7 days in a year for shooting Fiesta

commercials. It may be recalled that the Jr Bachchan, along with his father

Amitabh, had promoted Marutis multi purpose vehicle Versa though the duo failed

to light up its sales.

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HEADLINE: Ford rides on Fiesta for more josh

DATE: November 2005

Fords India story is so far just hazy. Its been almost a decade since the Indian

arm of the over 102-year-old Ford Motor Co entered the country through a JV with

Mahindra & Mahindra in late 1995. It had everything going its way. A globally

recognised Blue Oval brand. A market that was just opening up for international

passenger car brands. The stage was well set for Fords entry.

In fact, Ford adopted a twin location strategy. An assembly plant at Nashik that

gave it the much-needed headstart to hit the Indian roads with its product, and a

greenfield facility near Chennai, in which it pumped in Rs 1,700 crore to give the

car-major the much-needed elbow room to scale up operations in the long-run.

Starting with the assembled Escort, Ford India soon cleared this make way for an

India-specific mid-size sedan, Ikon. The Ikon remains an aspirational car with its

unique style and attractive entry level pricing. It has retained its Josh since it was

launched in November, 1999, Arvind Mathew, MD and president, Ford India said

recently. In fact, it is attracting a lot of first-time owners, especially from the IT

and BPO sectors.

Still, 10 years later and a handful of models, the annual production capacity at its

Maraimalainagar facility near Chennai is still less than 50,000 units in two shifts. On

a capital base of Rs 850 crore, Ford India had an accumulated loss of Rs 629.9

crore as of March 31, 04, while its topline was Rs 1,109 crore that year.

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HEADLINE: India cruises to top spot on Fords growth list

DATE: October 2005

Hes known in Detroit as Mr Nice Guy. He has none of his predecessor Jacques

Nassers ruthless reputation, but this fourth-generation scion means business all

the same.

In his maiden trip to India, William Clay Ford Jr turned on some of the charm that

has helped him win over naysayers on Wall Street. And, he explained why the India

story is so critical to a beleaguered Fords future survival.

In the capital to launch the latest offering from the blue oval the Ford Fiesta

Bill Ford put India right at the top of the companys growth list. When we talk

about optimising our global footprint we mean investing in areas that are growing,

he said. This market is critical to our plans for building a Ford Motor Company for

the 21st century.

Fords India plans are part of its Asian test drive. Ford is moving fast to accelerate

growth throughout Asia, said the 48-year-old chairman and CEO of Ford Motor

Company. We are especially excited about the potential we see here in India. As

one of the fastest-growing markets in the world, India is a top priority for us. A new

economic order is developing here, with growing purchasing power and a strong

desire for personal mobility. Although he refused to mention specific amounts of

investment in India, Ford was candid about why the company needs the Asian

growth pill. Ford, on a whole, is profitable but we have an issue with our US

operations and are dealing with it, he said. The growth rates in developed

markets are modest, whereas here, the y-o-y is growing at a double-digit clip. So

we need to restructure our US business and grow elsewhere in the world. Already,

we are growing in every part of the world, except the US, and we are profitable

everywhere except in the US, he added.

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NEWSPAPER: Hindustan Times

HEADLINE: Ford India to double sales with launch of new luxury car

DATE: September 2005

Mumbai: With the global launch of a luxury car in India by the year-end, Ford India

expects to double its sales to 50,000 units next year.

"We will double our sales to 50,000 units next year. We are hopeful that the launch

of the new premium car will help us increase our sales," Vice President, Sales and

Marketing Ford India V Sivaramakrishnan said.

The world premiere of the next new Ford car fitted with turbo diesel common-rail

injection (TDCi) technology in India would enable Ford compete more aggressively

in the Indian market, he said.

The luxury car would be available in both petrol and diesel versions. The diesel

engines "might be initially imported, petrol engines would be assembled by HM," he

said.

The company has invested around 100 million dollar in the new car, which is being

developed by Ford's global engineering and design team supported by a specialized

team of Indian engineers. With a "very high local content" it will contribute to

growth in the 'C' segment cars.

"We are doing a sale of around 24,000 units this year," he said, adding that the

company sold 27,000 units last year.

Sivaramakrishnan attributed the almost flat sales of Ford India to the increase in

input costs and fuel prices. He felt that improvement in road conditions andinfrastructure development would boost automobile sales. Ford has so far invested

around $470 million since its foray into India nine years back.

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NEWSPAPER: Business Line

HEADLINE: For

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