‘Need 15-yr pre­dictabil­ity on e-ve­hi­cle pol­icy to make right in­vest­ments’

Business Standard - - COMPANIES - ANURAG MEHROTRA Ford In­dia MD

Amer­i­can car maker Ford part­nered with Mahin­dra & Mahin­dra last month to ex­plore joint work­ing in ar­eas such as sourc­ing, prod­uct de­vel­op­ment and elec­tric mo­bil­ity. ANURAG MEHROTRA, manag­ing di­rec­tor( MD) at Ford In­dia, tells Ajay Modi that the part­ner­ship would help Ford to have a prof­itable growth in In­dia. Edited ex­cerpts: Did you have are look at any of the strate­gies in the firm af­ter tak­ing charge as MD this year?

The strat­egy was well laid out and it is cor­rect. I per­son­ally speak to cus­tomers, deal­ers and em­ploy­ees, and the in­tent is right. The key is how we go about ex­e­cut­ing it.

We will con­tinue to strengthen the brand, en­hance af­ford­abil­ity, im­prove lo­cal­i­sa­tion and scale to be­come the trusted au­to­mo­bile and mo­bil­ity brand in In­dia.

Ford, like sev­eral play­ers in the In­dian mar­ket, is yet to make prof­its. How far is prof­itabil­ity?

We don’t in­tend sell­ing any prod­uct at a loss. That is very clear. When you run a busi­ness, you need to make sure it is sus­tain­able, prof­itable. Ev­ery­thing that we are do­ing now is de­signed to be able to de­liver that. Our top line is grow­ing at 30 per cent, our Ebitda (earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion, and amor­ti­sa­tion) is grow­ing at 20 per cent. I think we are head­ing in the right di­rec­tion.

In April-Oc­to­ber, Ford’s do­mes­tic vol­ume de­clined 8 per cent, while the in­dus­try grew at 8 per cent. What ex­plains this?

If we go by the cal­en­dar year, we were grow­ing at 22 per cent dur­ing the first half and the in­dus­try was at 9 per cent. In the sec­ond half of the year, one of our sup­pli­ers had se­ri­ous chal­lenges and we were short on parts. The ramp up of the new EcoS­port was go­ing on in the Chennai plant. Both these fac­tors did im­pact us. But I would be sur­prised if, go­ing for­ward, we would not be beat­ing the in­dus­try growth rate.

Figo, your en­try seg­ment car, is do­ing lower vol­ume than the Figo As­pire and your SUV Eco Sport. Is there a chal­lenge?

Can you chase more vol­umes? Yes, you can. But it is go­ing to come at the cost of mar­gins, and if you look at the past two years, it has been a rel­a­tive neg­a­tive pric­ing en­vi­ron­ment. In years of growth, play­ers take 1-3 per cent pric­ing in­crease. But in past two-three years, while in­dus­try has not been mak­ing these in­creases, the level of dis­counts in the mar­ket has gone up. That puts pres­sure on mar­gins.

What will give the com­pany con­fi­dence to bring elec­tric ve­hi­cles for the In­dian mar­ket?

You need two things. The pol­icy frame­work has to be set ap­pro­pri­ately and then it needs to be sta­ble and pre­dictable. If you give these two el­e­ments to your pol­icy frame­work, the busi­ness will take over and start talk­ing about bring­ing in prod­ucts. To­day, I am de­vel­op­ing prod­ucts for 2022. I need pol­icy and that prod­uct is go­ing to last for an­other 10 years. So, I need a 15year pre­dictabil­ity on pol­icy, so that we can make right level of in­vest­ments for de­liv­er­ing on the gov­ern­ment’s vi­sion.

How will the part­ner­ship with M& Maid Ford’ s prof­itabil­ity?

A non-bind­ing deal has been signed be­tween the two firms to ex­plore ar­eas such as sourc­ing, prod­uct de­vel­op­ment, elec­tri­fi­ca­tion, mo­bil­ity, etc. We will work to­gether on all of these si­mul­ta­ne­ously. All the ar­eas iden­ti­fied with Mahin­dra would essen­tially be sup­port­ing the four strate­gic pil­lars that are crit­i­cal for our suc­cess in In­dia.

“WE WERE GROW­ING AT 22% DUR­ING THE FIRST HALF AND THE IN­DUS­TRY WAS AT 9% ...”

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