A Case Study Report On “Ford EcoSport – A Game Changer for Ford India Private Limited and Indian Automotive



Submitted to: Prof. N P Prabhakar

Submitted by: GROUP NUMBER - 5 Prateek Tyagi Prerna Bhardwaj Ramu Chhetri Ravi Pareek Ritu Soni Rohit Vatwani Saanya Gupta Sakshi Dhawan

Case Study Report/Group-5/Ford EcoSport


Executive Summary We, Prateek Tyagi, Prerna Bhardwaj, Ramu Chhetri, Ravi Pareek, Ritu Soni, Rohit Vatwani, Sakshi Dhawan and Sanya Gupta menbers of Group number 5 of section-J doing a case study report on Ford EcoSport: A Game changer for Ford India Pvt. Limited and Indian Automotive Industry. American auto king, Ford recently launched EcoSport to increase their market share and decrease the debts of Indian market. With a competitors in every segment, because EcoSport is not into one single segment as it caters many like in terms of price we can compare Ecosport with Swift Dzire of Maruti Suzuki which is a sedan, highest model of Polo (Volkswagen) which actually a hatchback, Honda Amaze which is combination of hatchback and sedan. EcoSport is positioned as SUV in India so segment wise its competitors are Duster of Renault, XUV 500 of Mahindra, Scorpio of Mahindra and Ertiga of Maruti Suzuki. Hence Ford is trying to tap all the segments through this low cost so called SUV. Ford invested around USD $142 million in Chennai plant for the manufacturing of Ford EcoSport to reduce the cost in terms of tax, outsource and import of material because they are getting most of the material from local supplier itself and they are also following “Child Parts Strategy” to maintain this low cost of ownership vision. Ford EcoSport changed the whole game of Indian automotive industry in past 4 months after the launch as the waiting time reaches to highest point of 9 month for any car in India with 30,000 booking in just 17 days of launch in the time where other players running for every single customer because of crises. Change of strategy and understanding of basics of Indian market works for Ford this time. But the recall made by Ford (around 970 diesel variants) because of a big technical glitch made a black mark on the EcoSport’s customer along with the long waiting time. This will hamper the call of Indian customer to EcoSport or will cause a non-creating positive for Ford’s EcoSport to gain more publicity among all regarding the phrase “Yes we care for you”, which will be an interesting look out for us.

The Indian Automobile Industry The automobile industry is one of India’s major sectors; accounting for 22% of the country’s manufacturing GDP. The Indian auto industry, comprising passenger cars, two-wheelers, three-wheelers and commercial vehicles, is the seventh-largest in the world with an annual production of 17.5 million vehicles, of which 2.3 million are exported. Two-wheelers dominate the Indian market; more than 75% of the vehicles sold are two wheelers. According to Ministry of Heavy Industry and Public Enterprises, the total turnover of the Indian automobile industry was estimated at USD 73 billion and exports were estimated to be USD 11 billion in the year 2010–111. The announced cumulative investments in this sector were USD 30 billion during this period. The main automobile hubs in India are based at Chennai, Gurgaon, Manesar, Pune, Ahmedabad, Halol, Aurangabad, Kolkata, Noida and Bangalore. Chennai is the biggest hub accounting for 60% of Indian auto exports. According to the Department of Industrial Policy and Promotion (DIPP), the auto sector accounts for 4% of total foreign direct investment (FDI) inflow into India. As per the DIPP’s FDI figures for May 2012, FDI inflow into the auto sector for the period April 2011 to March 2012 totalled USD 923 million; cumulative FDI into the sector for the period April 2000 to May 2012 stood at USD 6,853 million. The Industry was not always this glorious. It has come a long way since the first motorcar was imported and import duty on vehicles was introduced about a hundred years ago. Indian Great Royal Road (Predecessor of the Grand Trunk Road) was conceived2. The first car brought in India was by a princely ruler in 1898. Simpson & Co established in 1840. They were the first to build a steam car and a steam bus, to attempt
Case Study Report/Group-5/Ford EcoSport 2|Page

Ford and Fiat entered the market.. Automobile Products of India Limited. During this decade there was not much change in the four-wheeler industry except the entry of Sipani Automobiles in the small car market. It was the death of the License Raj and the Automobile Industry was allowed to expand. modifications in licensing policy. In 1991 new Industrial Policy was announced. Premier Automobiles Limited. Beginning with mid-1991 the government of India made some radical changes in its policies bearing on trade. de-licensing of some ancillary products. Ford’s Ikon and the new look Mitsubishi Lancer were launched with an eye on the emerging market5. In 1983-84 Bajaj Tempo Ltd. Station Wagon.. Launch of Ford EcoSport in India Case Study Report/Group-5/Ford EcoSport 3|Page . The major factors affecting the industry's structure were the implementation of MRTP Act. Peugeot. Hindustan Motors Ltd was incorporated and their first vehicle was made in the year 1950. Honda.motorcar manufacture. General Motors. Further tightening of Emission norms was done in 1996. Hindustan Motors Ltd. In the year 1942. Ashok Leyland Limited. The 90s became the melting point for the car industry in India. Other three car manufacturers namely. In 1919 at the end of the war. In 1999 the Supreme Court passed an order directing all car manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of May 1999 in National Capital Region (NCR) of Delhi. Suzuki. Standard Motors Products of India Limited. Hyundai. Mitsubishi. Volvo. A few more companies came up later. entered into collaboration with DaimlerBenz of Germany for manufacture of LCVs. At that time there were five Passenger Car manufacturers in India . Alto. Sipani Automobiles. Toyota. In 1928 assembly of CKD Trucks and Cars was started by the wholly owned Indian subsidiary of General Motors in Bombay and in 1930-31 by Ford Motors in Madras. broad banding of the products. In 1997 National Highway Policy was announced which had a positive impact on the Automobile Industry. to build and operate petrol driven passenger service and to import American Chassis in India. New models like Maruti’s Classic. Premier Automobiles Ltd. a Japanese firm. concessions to private sector (both Indian and Foreign) and foreign collaboration policy etc.. also introduced new models in the market. And Premier Automobiles Ltd was incorporated in 1944 and in 1947 their first vehicle was produced3. Premier Automobiles Ltd. fiscal affairs and so on. Hindustan Motors Ltd. From 1888 Motors Spirit attracted a substantial import duty. Standard Motor Production of India Ltd. Important policy changes like the relaxation in MRTP and FERA. Mercedes-Benz. Standard Motor Production of India Ltd. The Maruti Udyog Ltd was started in the year 1983 in collaboration with Suzuki. foreign investment. Mahindra & Mahindra and TELCO received approval. Many multinationals like Daewoo. 3. This and many specific problems affected the Automobile Industry adversely2. a large number of military vehicles came on the roads. The Indian Automobile market in general and Passenger Cars in particular have witnessed liberalization.Maruti Udyog Ltd. industry. exchange rate. Government continued with its protectionism policies towards the industry.. During the seventies the economy was in bad shape. resulted in higher growth and better performance of the industry than in the earlier decades4.. FERA and Oil Shocks of 1973 and 1979. Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in 1992 for Diesel Vehicles.. In 1953 the Government decreed that only firms having a manufacturing program should be allowed to operate and mere assemblers of imported CKD units be asked to terminate operations in three years. Only seven firms namely Hindustan Motors Limited. Bombay and Calcutta.

59 Lakh Version 3. the charming Ford EcoSport seemed to have skipped the steps entailed in the ‘Change Avatar’ process and straightaway headed into the production line from the drawing board9. “We have never seen a compact SUV as dazzling as EcoSport in India.6. The Company is also investing an amount of 1 billion dollars to set up its second production facility at Sanand in Gujarat and is expected to be operational by 2014.1. and unlike many other vehicles that go through the process of developmental changes like the change avatars that is. The design of this car is exceptional.90 Lakh Version 2. the UVs are also useful for longer journeys. This five seated SUV stands high and tall. It’s partly black in color so that it looks less bulky. With these two plants.5 litre petrol at Rs. The American auto major. launched its much awaited compact sports utility vehicle (SUV). Turn once. for the company was aggressively testing the EcoSport in the country and the one that has been launched is almost 70% locally manufactured8.5. Ford EcoSport follows the Ford's latest design theme featuring huge front bumper and peeled-back head lights with a sporty rear-end. EcoSport on 26th June. It looks extremely aggressive from its front. At the launch of the EcoSport. The lucrative Indian car market that was out and out. The US auto major Ford. bent more towards hatchbacks and sedans to a certain extent. The model is available in the following variants:     Version 1. The SUV has taken an 18 month gestation period to get it Indianized. which is known for its excellent mileage and reliability.8.The automobile manufacturers automatically started looking to enhance their portfolios for the growing Indian market with their respective manufactured utility vehicles. Ford India has invested $142 million at its Chennai plant to manufacture the EcoSport. thrice around it and you just can’t stop wondering how unique this car is. It has a massive front bumper sporting a huge three layered air dam. Give it a look and it’s hard to believe if it’s actually that short. Ford is also not behind in this prevalent trend with the introduction of Ford EcoSport.1. It is the best looking Sport Utility Vehicle in its segment.69 Lakh Version 4. from a larger than life visual on board. thereby saving fuel7.1.5 litre diesel at Rs. top Ford officials said that a multi-segment spread Case Study Report/Group-5/Ford EcoSport 4|Page . the Company will have an output capacity of 2. The people at Auto Expo couldn’t believe if they are going to see this car plying on Indian roads. and then. 5.59 Lakh (ex-showroom Delhi)10.5 litre petrol with automatic transmission at Rs. The reason for this shift is cited with the fact that besides. is now changing trends and falling towards the UV (utility vehicle) segment.45 Lakh Ford EcoSport has been developed specially to cater those customers who want a compact SUV within a budget of 5-10 lakh rupees.1 litre petrol with Ecoboost technology at Rs. This SUV was first put on display for the public eye.The gradual surge in the fuel prices has made the Indian car enthusiasts and other people see an entirely fresh trend. 2013 in India with a price tag of Rs.7 Lakh engines annually14. The advantage of localizing the EcoSport is that the pricing of the SUV can be set aggressively. to the more realistic production versions. Ford has clearly stated that EcoSport is a sub 4 meter car which means shorter than many of the hatches. which was the most anticipated launch of the year.” There is no doubt that Ford has tried to bring all the SUV characteristics to this car. at the 2012 Automobile Expo held in Delhi.7.4 Lakh vehicles and 2. twice. Ford EcoSport is powered by the award winning 1. offering decent space for your daily trips. to the notched down clay models.0 litre EcoBoost engine.

the Indian automobile consumer is now rotten for choices.was part of the EcoSport's marketing and positioning strategy. discounts and added benefits would certainly be on the rise as the auto industry drives into the festival season15." said Ford India president & MD Joginder Singh. It could also trigger off a discount war in the marketplace as rival brands offer fresh benefits to counter the pull of a newly launched vehicle. hatchbacks.000 in 2015 in India. Though sales of sport utility vehicles fell 17." At Rs 7. with population of working women increasing. costlier. "For us. In India. is one of the major reasons for this segment’s growth in recent times. it's a new segment and the pricing will help draw customers from a broad range of products . With all the major manufacturers setting up their plants in India. With these two plants. the Company will have an output capacity of 2. "The EcoSport is a unique proposition and we have to keep in mind what the Indian customer wants in terms of both the product features as well as the price positioning. Analysts say the EcoSport could also redefine the compact SUV segment into a position that overlaps both the sedan as well as the SUV. you could call them — mothers ferrying their kids and groceries in rugged sports utility vehicles (SUVs) — the 'M Class mass. The Company is also investing an amount of 1 billion dollars to set up its second production facility at Sanand in Gujarat and is expected to be operational by 2014. With urbanization reaching a point of saturation in major cities.44 lakh for the automatic transmission.5% in July 2013. as mentioned by many users. being the starters. From microprocessor controlled fuel injection to Bluetooth enabled audio systems to connect your smart-phone. is available to the consumers at a far lesser cost. despite the doldrums the country's overall auto market has suffered this year. the sense of security. But with oil prices on a Case Study Report/Group-5/Ford EcoSport 5|Page . the technology that was previously imported and hence. workplaces are shifting to the suburbs. traction control etc”. The demand for smaller SUVs is expected to boom over the next few years in emerging markets. in China they are the 'tiger moms'.89 lakh for the higher end petrol and Rs 8.4 Lakh vehicles and 2. companies are aiming to tap the relatively strong demand for affordable crossover vehicles.sedans. the consumer touch-points have changed.18 With all the major manufacturers having their manufacturing setup in India. The automobile market dynamics in India has changed over the last couple of years. small SUVs and even those who already have a bigger SUV and want to settle for a vehicle this size. the priciest EcoSport variants are positioned alongside the Renault Duster's entry level models. Ford India has invested $142 million at its Chennai plant to manufacture the EcoSport. Also. With consumers becoming more aware about terms like “torque.7 Lakh engines annually14.' And they're doing their bit to contribute to double-digit growth in Compact SUV segment even as sales in the overall passenger vehicle market remain sluggish17. The typical “Mileage” mindset has changed as consumers have also started demanding for “Performance and Safety”. Wit h the middle class growing. they've been dubbed the 'soccer moms'. Although not too many companies would have the stomach for an all-out price war at a time when the sentiment is sluggish and the rupee is sliding sharply. with sales in the segment forecasted to grow from just 6.140 vehicles in 2012 to more than 126. the segment had been a rare bright spot in India's otherwise gloomy auto market. The SUV market in India is known for producing petrol guzzling monsters. the first monthly slide in four years. INDUSTRY ANALYSIS Pestle Analysis – In the United States.

and Unemployment rate.steady rise. Back in 2003. 7.20 Factors like Market prices. a beginning has been made. Ford virtually created the compact. and has an impact on the GDP. chances are the redesigned EcoSport will reclaim Ford's crown. from launch on 31 December. while the diesel EcoSport Ambiente is priced at Rs. providing the mileage of a hatchback is driving the SUV market.64 lakhs. Availability of ULP was further extended to 42 major cities and now it is available throughout the country. The industry is impacted by. however. Derived dominion adjustment and technological assistance among nations helping the ford India in boosting the endowment and constructing the modern standards which can encounter with the present outline. oil charges and costless business continue which access the customer to devote on the automobile. One of the reason because of which ford was able to price its cars so low was that it paid attention to the current Indian economic situation( constant rupee fall and rising inflation) & adopted a strategy of manufacturing 70% of its car locally as a result it was able to bargain on its price. But.93 lakhs and the Trend variant is priced at Rs. Currently. which finally tipped the EcoSport off its segment leading perch. Commencement of new organization constitution influences the ford to advance its standing orders which are essential for assembling a valuable transport. the interest and the inflation rate. Renault launched the locally-built Duster.01 lakhs. From April 1995 mandatory fitment of catalytic converters in new petrol passenger cars sold in the four metros of Delhi. Inflation. like the Suzuki Jimny and locally assembled Mitsubishi Pajero TR4 [Shogun Pinin in Europe]. 8. front-wheel drive city SUV segment in Brazil. yet. Ford and Honda (Civic Hybrid). Case Study Report/Group-5/Ford EcoSport 6|Page . Vehicle manufactures are also working towards bridging the gap between Euro standards and Indian emission norms. Mumbai and Chennai along with supply of Unleaded Petrol (ULP) was affected. It was only in 1991 that the first stage emission norms came into force for petrol vehicles and in 1992 for diesel vehicles. both heavier models more off-road focused. we are behind Euro norms by few years.06 lakhs and 8. which was tried by leading manufacturers like Toyota (Prius). Calcutta.19 FORD MOTOR COMPANY Operates in automobile industry which is impacted by the GDP. there is a gap in comparison with technologies available in the USA or Europe. The significant environmental implications of vehicles cannot be denied. the unemployment rate. any manufacturer coming with a SUV that performs at par with any competing SUV. This has forced all manufacturers to either build vehicles with more efficiency and lesser emissions or introduce hybrid cars. 9. and emission norms are being aligned with Euro standards and vehicular technology is being accordingly upgraded.21 The comparisons with other leading players proves the above motioned strategy was beneficial: Ford EcoSport v/s Mahindra Quanto – People opting for the C6 or C8 variant of the Quanto are very likely to opt for the base EcoSport diesel which comes in at a cheaper price. The need to reduce vehicular pollution has led to emission control through regulations in conjunction with increasingly environment-friendly technologies. Since India embarked on a formal emission control regime only in 1991. The Quanto’s top variants are priced at Rs. Late last year. lobbing the new EcoSport into the ring to compete with small utility models with rear-or all-wheel drive.

10.Ford EcoSport v/s Premier RiO – First mover advantage doesn’t necessarily work always. we will see the price difference between them is Rs. 6. 'Sigma'.94 lakhs. Visteon designed and is manufacturing key heating.63 lakhs that is a difference of Rs. The Duster has been overpriced since day one and multiple price hikes have only made the overpriced Duster even more overpriced. For models in the Rs 5-7. rear parking sensors.93 lakhs. a company needs to sell at least 3.000 units a month to break even. a difference of 2. 10000/.49 lakhs. 14.6 cu inch/1.05 lakhs while the base EcoSport is priced at Rs. Considering India where more than 50% of population is youth Ford EcoSport paid a lot of attention on designing and giving it a menacing and jazzy urban youth look which will surely attract Indian young population to this fuel efficient car hence the launch of ford EcoSport in 5-7 lakh segment. 2.6litre flex fuel unit developing 113bhp on 100% ethanol. Then EcoSport is also rendered with ESP(electronic Brake Program). The engine in EcoSport is an all-alloy.73 lakhs) with the top-end EcoSport diesel.03 lakhs. 12. the top-end Duster costs Rs. Comparing the top-end EcoSport diesel with the top-end Duster 110 PS RxZ (Opt) shows a whooping price difference of Rs. The base Duster is priced at Rs.88 lakhs. but its products have always been youth centric. which alerts the emergency service automatically in case of hazardous situation etc. The top-end DZire is priced at Rs. Basic versions are no longer offered by ford. Case in point is the RiO. 2. That.42 lakhs. 2000/. along with new high-strength steel in the bodywork. The base Duster diesel is priced at Rs. 9. 7. Case Study Report/Group-5/Ford EcoSport 7|Page . is quite horrible when it comes to dynamics and quality.cheaper and much better in terms of quality and dynamics. although the Ertiga offers you 7seats and there is a CNG option too. Ford EcoSport v/s Renault Duster – Ford has created absolute havoc for Renault. 8.96 lakhs. a hill start assist and added new features like SYNC. It has always been high on introducing new and innovative technological advancement in its models. The base EcoSport is Rs.13 lakhs! If we compare the top-end Duster 85 PS diesel (priced at Rs.66 lakhs. 3. 97. Ford claims better fuel efficiency with this engine 6. a (car) company needs to obtain a minimum volume of a specific model.64 lakhs while the top-end EcoSport Titanium (O) is priced at Rs. Yes. Rs. The top-end diesel Ertiga ZDi is priced at Rs. in upscale versions.07 lakhs. The petrol engine on the RiO is below average and the only saving grace is Fiat’s Multijet diesel engine in the RiO which is priced at Rs. while the 1. Ford EcoSport v/s Maruti Ertiga – The ZXi variant of the Ertiga is priced at Rs.06 lakhs while the base EcoSport diesel comes in at Rs. All these qualities make this car a perfect one for the customers of India and definitely the most admired one in its segment. side and curtain air bags and stability and traction control. We get way more features in the EcoSport. ventilation and air conditioning (HVAC) components for the Ford Ecosport launched recently in Brazil and destined for global sale. And ford EcoSport had received 30000 bookings in the month of its launch itself. 8. Renault really needs a French revolution now. Using the new Fiesta’s architecture also allowed Ford to specify safety-related upgrades such as anti-lock brakes and driver and passenger air bags plus. The DZire ZXi costs Rs. Ford EcoSport v/s Maruti DZire – The DZire has had a dream run till now but the EcoSport might spoil its party. kept the average model-for-model weight rise down to 88lb/40kg despite considerably more standard equipment. Also Ford has not only been juggling with many models.more than the diesel EcoSport Trend.5-litre petrol EcoSport Trend variant.5 lakh range. To turn profitable. 10. which although the first compact SUV in India.15 lakhs.000 units a month for products in the Rs 3-5 lakh price range.5-litre petrol EcoSport Titanium is priced at Rs. and 6.more than the 1. 7. 6000/. 10. 9.

India is majorly a hatchback and sedan market. centre-mounted HVAC system. and Chevrolet Enjoy. There a few existing competitors that have brand names in this market who also compete in terms of the market and the pricing of the vehicle. The already existing brands. The Indian consumer is price sensitive. Mahindra Thar. How much your supplier has control over increasing the Price of supplies? In the relationship between the automotive industry and its supplier. The SUV segment is comparably small. The next factor identified by porter is the ‘Threat of Substitute Products’. Another factor that affects the industry is ‘Industry Rivalry’ or ‘Barriers to Entry’. Demand in the market. how much control the buyers have to drive down your products price. compressor. Mahindra & Mahindra Quanto. Maruti Suzuki Desire. Tata Motors. Its most notable competitors within similar price range includes Renult Duster. Maruti Suzuki Ertiga. condenser with integrated receiver dryer. Porter’s Five Force Analysis – Michel Porter identified five forces that influence an industry [porters Five Forces model has been explained in detail in Exhibit 8]. and air conditioning lines with 'zero leak' metal seal fittings. Honda. The air conditioning system is among the first to apply a 45mm 'tube-fin' evaporator construction for maximum performance in transferring heat out of the cabin. Red Ocean and Blue Ocean Strategy Blue Ocean Strategy assists us during strategic planning.Parts supplied by Visteon for the Ecosport include a compact. The giants such as ford are able to dictate their terms to their suppliers. Can they work together in ordering large volumes. Mahindra Bolero. The first factor is ‘The degree of Rivalry’. In the relationship between the company and the buyers. The last two factors identified in the five factor model are ‘Bargaining Power of Buyers and suppliers’. the later has an upper hand as the market is very competitive and there are a lot of choices available as mentioned above. Bargaining power of the supplier indicates how strong is the position of a seller and bargaining power of buyers means. We will analyse the model from Ford’s perspective. with the aim being to make the competition Case Study Report/Group-5/Ford EcoSport 8|Page . the power lies mostly in the hands of the industry manufacturer. Ford EcoSport is priced ad at Rs. Honda Amaze. Mahindra and Mahindra Automotive Industry. Tata Sumo. Government policies in terms of emissions and other specifications and the cost of manufacturing the product. 5. and Force Motors Ltd. Renault. It enables us to concentrate on the creation of new markets via new offerings.59 lakhs23 which makes it one of the most reasonable compact SUVs. Premier Rio. The increasing oil prices. With decades of experience therefore while launching the EcoSport it will not have barriers such as a start-up company with licensing but other effective barriers such as. These are: Maruti Udyog Limited. Ford is an already established brand in the automobile industry. But then there is a huge market to tap and the SUV market has just started to see growth and the people are patient enough to wait for a order to delivery period of almost 6 to 9 months24. About 70% of the components of ford EcoSport are made in India itself.

And Ford India’s intent to price the EcoSport competitively have been evident for quite a while now26. The huge volumes. They focus on competing in a marketplace which already exists. It is launching in India on the back of strong demand shift towards the SUVs. the Endeavor. is expected to be instrumental in allowing Ford to achieve the sub-6 lakh rupee price tag for the entry level variant. Red Oceans Strategy.000 EcoSport’s in India. which is affecting the net profit. Such a strategy therefore allows firms to largely play a non–zero-sum game. Here is some of the financial analysis of Ford India Private Limited before and after the launch of EcoSport. While localization is one strategy. From last 5 years company net profit is negative. Ford is said to planning to build no less than 150. already contain a number of competitors. before the EcoSport. Case Study Report/Group-5/Ford EcoSport 9|Page . especially due to the additional 3 percent excise duty imposed on SUVs in the Union Budget. Company is coming with new plant is sanand and 8 new models in a decade which will help company in increasing market share and making new profits. the EcoSport does have a lot riding on it. But the EcoSport could make the difference. was selling only one SUV in India. These factors. The Ford Ecosport is quite simply the most important product for the American car maker in India due to two factors26: 1) Ford needs a best-selling product to take the place of the Figo. The Eco Sport’s compact dimensions mean that car buyers will tend to compare the EcoSport with B+ segment hatchbacks and entry level compact SUVs such as the Premier Rio and the Mahindra Quanto. at least by Ford India’s standards. Ford. A Red Ocean Strategy is a strategy which is aims to fight and beat the competition. In a price sensitive market such as India. are expected to give the car maker better negotiating ability with vendors supplying parts for the EcoSport. backed by high localization of parts. compounded annual growth rate of 34% is shown in sales and if we look at expenses they are contributing around 96% of sales. Financial Analysis of Ford India Private Limited Financially Ford Ecosport is helping Ford a lot to recover the losses which occurred in past. When we look at past trend of sales of ford India. with high payoff possibilities. They focus on beating the competition. the other strategy that Ford could adopt in order to price the EcoSport competitively is that of betting big on volumes. The EcoSport at a sub-6 lakh rupee price tag is something that is quite apt for the car. showing high growth at a time when car sales in India are going towards slowdown. So. a sharply priced car has all the trappings of becoming a success right from the word go. which is becoming a dated offering26. So.irrelevant so that an organization can grow. a sub 6 lakh rupee price tag seems just what the doctor ordered for Ford to achieve big numbers for the crossover27. in order to improve this company is planning for new models and extension of capacity for future. Sales have somewhat slowed in the last couple of months. 2) The SUV segment is one of the outliers in the Indian car market. along with the excise duty benefit the EcoSport stands to get from the Indian government due to the car’s sub-4 meter length.

63 7.399. registering 5% increase.62 2. the all-new EcoSport. Ford India said in a statement.580 units during the April-August period of FY 201213.18 Sales trend 7.065 units in August 2013 registering 7% growth in comparison with August 2012 sales of 10.80 -209. facts and news of ford. compared to 7.119.412 units against 9. a jump of over two-fold.025 units as against 33. sector is growing with average of 14%.89 1.64 8.15 per cent to 7.23 5.428. recording a 2 per cent increase.236 units in the same month last year. The year-to-date sales of Ford India in the fiscal year 2013-14 along with exports stood at 45.352 units. The company exported 4. recording a growth of 22 percent.604. 2 A significant customer interest in the recently launched urban SUV. Ford India reported 48.338 units on the back of newly launched compact sports utility vehicle EcoSport3.80 Slope 0.068.34885631 1 Expenses 2.03 If we look at July 2013 figures.867 units in July this year as against 6.323 units in the same month last year. so we can make analysis that company is going to show constant growth of 14% in future.23 per cent increase in total sales in July this year at 12.754.If we look at growth of automobile sector. The domestic sales for the period is 8% less for the April-August period in FY 2013-14 at 31.840 units in August last year.89 6.366.264 units during same period of previous financial year. The sales of Ford India including exports stood at 11.50 -140.547.636. Exports for the month of August 2013 stood at 3.29 Case Study Report/Group-5/Ford EcoSport 10 | P a g e .44 -76.93 Profit1 -37.50 6. Domestic sales also went up by 26.18 2. The Company had sold a total of 8.684 units during same period of FY 2012-13.512 units in August 2012.144. helped add up to Ford India’s second-best sales month so far this year.008 units in August this year. Year 2008 2009 2010 2011 2012 1 Net Sales 2.67 8.057 cars against 2. The exports went significantly high for the period at 49% at 14.38 5. it added.471 units last month compared to 2. company is showing positive results with new model of ford Ecosport.31 -107.087 units in the year-ago period.437 units against 43.32 2.47 7. The domestic sales accounts for 8.

84 2010 2011 2012 1 0. This is will create bad impact if some investors planning to invest. Year Current Ratio Turnover Ratios Inventory Debtors 2008 0. service innovations and network expansions33. Beyond this after looking at future aspects we also forecasted according to industry and company growth.52 7. Strategic moves by Ford EcoSport (Positives and Negatives) Positive factors for Ford EcoSport  Low Cost of Ownership and Low Pricing Strategy – Ford EcoSport will be supported by a well thought out strategy of robust and well tested components and spares and faster.52 31.07 8. Money from debtors is not collected fastly. If we look at figures in 2012 it is better in compared to 2011. Turnover ratios establish the relationship of sales with various assets. Low values for the current ratio (values less than 1) indicating that a firm is facing difficulty meeting current obligations. Lower debtor turnover ratio is not good because it tells us that we have not managed debtor’s better ways. After the new plans company is showing positive sign. Case Study Report/Group-5/Ford EcoSport 11 | P a g e . To offer this.47 5.4 9. Innovative “Child Parts” strategy and low pricing specially developed durable parts plus technologically advanced powertrains contribute to low price of Ford EcoSport and low cost of ownership.17 26. Ford’s main vision behind launching EcoSport with this strategy is because they want to provide a low cost of ownership and service over time.36 9. affordable and timely service.83 5. The current ratio32 is balance-sheet financial performance measure of company liquidity. which shows company is trying to implement strategies. If we look at figures it is decreasing every year which is directly affecting profitability of company.66 7. Ford worked hard on a three-pronged vision of efficient technology and parts design.Ratios A financial ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. The assets are acquired to generate the sales revenue and the position of profit depends upon the value of sales.35 Turnover ratios are also known as activity or efficiency ratios. The total fund raised by the company is invested in acquiring various assets for its operations.7 9. Inventory turnover ratio31 measures how frequently the company's inventory turned into sales.97 0.92 2009 0. Debtor’s turnover ratio31 shows how quickly the credit sales of the company have been converted into cash.

They settled a complete manufacturing unit dedicated to this car only in Chennai.000 bookings in the fortnight the launch of Ecosport in India on 25 June. Ford was swamped by as many as 30. powers the Ecosport range in India offering amazing and superior fuel-efficiency and thus a low running cost over the ownership lifecycle. Ford India is experiencing a significant rise in footfalls at dealerships across all regions and most dealerships across all regions and most dealerships are witnessing record levels of daily bookings. Low price. and these have been in readiness for this overwhelming demand for the EcoSport. 35. According to SIAM. Since the launch of EcoSport in India. Out of the 260 dealer touch in 360 cities. This led to increased waiting period of SUV’s delivery.59 lakhs to 7. Ford is mainly banking on high volumes as they are more concentrated towards volumes rather than profit margin to increase their market share in India.8 lakhs (depending upon the variant). plenty of features make Ford Ecosport as 1st choice of customer who are preferring high-end Hatchbacks and entry level SUVs. Ford Ecosport is a compact SUV with aggressive price range from 5.  High Demand of Ford EcoSport – Ford EcoSport becomes the highest selling SUV in last quarter. Providing easy and quick service for the EcoSport also has been addressed with more dealership adding quick service bays and Ford-pioneered “Quick Lane” service that takes customer experience to the next level in terms of comfort and convenience. For some models waiting time is extended to 180 to 270 days with minimum waiting time of 60 days on few other high-end models. the demand exceeded considerably and eventual outnumbered the supply.000 pre-bookings in just 17 days of launch. the company has sold 8717 units of EcoSport till July. potential buyers lured by its price. Over a period of time.715 units in July itself34. 40% cover tier II and III. Ford’s mobile vans also available at around 20 locations33. the front bumper comes in three separate child parts allowing cheaper replacements33. which means not replacing of entire assemblies. the availability and affordability of parts has greatly increased. For lowering the cost Ford strategies as invested around 142 million USD. For example. including the internationally acclaimed EcoBoost. with enquiries extending to other Ford nameplates as well. Petrol variants are offering high waiting because Ford is more concentrating on Diesel models as they are having high demand rather Case Study Report/Group-5/Ford EcoSport 12 | P a g e .Three class-leading powertrains. Because of these feature. size and looks. Being produced on a global platform. Because of heavy demand booking for some variants are now stopped which is effecting the buying of potential customers. the all new EcoSport benefits from the huge economies of scale in terms of global sourcing that benefits the customers. Since mostly all service parts are produced locally. buyers have turned up in huge numbers to book themselves a ride in this SUV. good in style. Ford EcoSport is fully geared up to need the service needs of customers. Ford Ecosport right now enjoying 30. With 260 outlets in around 138 cities and towns in India. This high demand and high bookings helped Ford Indian on financially sector to a high extent (Refer to financial analysis). “Child Parts” strategy comes from the production of Ford Figo. Since Ford EcoSport is most selling SUV in India right now and due to this amazing response. We have to look more into how they are managing this much low cost and how this will affect the overall sales of Ford cars and particularly Ecosport in India. and 4.

This car comes under 4 meter segment with higher ground clearance. It is providing you the pleasure of SUV along with easy city rides because of compact size and handling.000 bookings in a fortnight. The production centers of Ford are clearly not in a position to handle so much demand. which plans to start selling its compact SUV XA Alpha next year. hence the excise duty reduced to 4% for customers and 1% for company and similarly on the spare parts as well. We have to decide or made any conclusion on this as on what Ford need to concentrate more – Concentrate on diesel models as their sales are more or concentrate on high production of petrol variants as their waiting is continuously increasing36. barely days after its launch. If we calculate compound interest of this money for next 9 months @ 10% rate then also customer is losing some money to buy this car and hence costing of the car will automatically increase37.than petrol variants. The recall came at a time when bookings for the model have swelled and deliveries had begun. One of the biggest reason behind so many advantages is the mapping of car. new features and new product at same price at that time? Also for pre-booking of Ford Ecosport customer need to pay around Rs. with its Duster SUV. Along with practical advantages related to driving status. particularly of those customers whose cars are recalled & their money is somewhere in between without the car and to those who are planning to buy the car in future.000. Recall by Ford Ecosport – Ford recalled 972 of the diesel powered Ford Ecosport. Ltd. There is waiting period of about 90-270 days on some models. EcoSport also gives choice in type of Engine along with variant which is also 1st time in India with around 4 engines distributed in 10 different variants. Renault Duster was present but the prices are about 20% more than that of EcoSport. Ford India Pvt. size and looks. Negative factors for Ford EcoSport –  Long Waiting time – Lured by its price. It 13 | P a g e  Case Study Report/Group-5/Ford EcoSport .e. Tax relaxation from government is also coming for company as well as customer because of size pattern which is adopted by Ford EcoSport. new modifications. Ford and customers also enjoying financial advantages on this car.  Segment Advantage – EcoSport’s design is new for Indian customer with that price and no doubt its best in class. because of some serious technical issues which could have impact on customer safety. EcoSport’s segment is also new to the Indian market as it is launched under compact SUV segment in which only one car i. risks losing customers to not only rivals such as Renault SA. 80. which is nearly perfect for Indians and Indian roads. This can dent the customer sentiments. but also Maruti Suzuki India Ltd. Ford Ecosport received as many as 30. If it fails to boost production to meet the demand for the EcoSport. Also why should a customer prefer the same car after 6-9 months when there is chance a new design.

recalls and maintain the customers who have to wait for next 9 months for their own Ford EcoSport. recent recall by Ford of some of its diesel cars can make situation worst for EcoSport. We have to analyze “Is this recall a strategic move by Ford to attract more customers. voluntary recall action to ensure customers' safety and satisfaction. As many of the competitors already planned to put atleast one car in EcoSport’s segment in upcoming 2 or 3 months.will also generate a doubt in the minds of those customers who have purchased the car and are not recalled. Conclusion Ford’s strategies to launch EcoSport for Indian market seems to be worked excellently for them as per the current figure of the sales. long waiting time of about 9 months may cause loosing of potential customer because after 9 months many new cars of same segments will come to tap the market in which EcoSport is playing the game. low cost of ownership. then how will this affect the sale of Ford Ecosport38?”  Compromise on plastics quality for price--Major chunk of the plastics used in building the car are hard plastics and are inferior to most premium vehicle. differential segment etc. the Hundai i20. The strategies like “Child Parts strategy”. Case Study Report/Group-5/Ford EcoSport 14 | P a g e . Is recalls made by Ford right at this peak time of sales performance or is that a strategic move by Ford to put EcoSport in news again and again. And if it is so. This is not a car for which the owners would be raving about on quality. The company issued a quick notice saying "This is a proactive." Now it can be taken as a strategic move by company as they want to prov e “Yes we take care off any problem with our product and we will not ignore them”. On the contrary of this long waiting time. for example. On a related note. it will be very interesting to see how Ford will react on that and how they will hide the big problems of not using good quality external material. The real issues however observed are loosely fitted plastic panels around the gear lever and meter console which could easily shake the entire instrument console by hand. the same problem was observed with the fog lamp housing on the bumper39. As Indian customer is very reluctant in buying items like automobile. low pricing strategy. Even after so much of positive attributes at that low cost what makes Ford’s customer wait for long time and dishearten the customers by recalls. makes Ford EcoSport most demanded car in India during past 4 months period.

Case Study Report/Group-5/Ford EcoSport 15 | P a g e .Exhibits Exhibit 1 – Market Shares of Various Automotive Companies in India (4 Wheeler) Exhibit 2 – Automotive Clusters in India.

Exhibit 4 – Passenger vehicle production in India according to ACMA.Exhibit 3 – Market share with reference to parent companies globally and locally. Case Study Report/Group-5/Ford EcoSport 16 | P a g e .

Exhibit 5 – Features of different models of Ford EcoSport. Case Study Report/Group-5/Ford EcoSport 17 | P a g e . Exhibit 6 – Comparative Chart of EcoSport with other SUV’s.

Case Study Report/Group-5/Ford EcoSport 18 | P a g e .Exhibit 7 – PESTEL Framework. Exhibit 8 – Porter’s five force model.

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