Why Ford won’t give up on India
NEW DELHI – Americans might not know much about Ford’s operations in India, but some may soon be driving a vehicle made there.
Ford’s newest, smallest SUV in the U.S., the EcoSport, is imported from India.
That’s only one product of Ford’s effort to make a business success out of its Indian operations, reviving old partnerships as the company makes a fresh pitch to crack one of the world’s highest potential, but equally challenging, car markets.
Having invested $2 billion but yet to make a profit, the company has gone back to local heavyweight Mahindra & Mahindra, best known in the U.S. for its farm tractors, to work out new products and partner on cost-effective technologies, including those related to electric powertrains.
Ford, whose sales in India have risen in recent months year over year, holds just a 2.7% market share there. The company hopes Mahindra will help it gain access to local suppliers while enabling cost-efficient development of vehicles, especially SUVs.
Ford entered India in 1995 and partnered with Mahindra — then itself a fledgling player in the passenger vehicle business — though this was shortlived.
The two parted ways in 1998, as Ford drew up an ambitious plan, perhaps looking to find a stronger-run standalone as it also planned to use the India factories for meeting export needs.
However, Ford has managed little success and has remained — more or less.
It has been hanging on with vehicles such as the Figo compact, launched in 2010 after an in-depth examination of the Indian consumer. It was the first vehicle that got Ford into the heart of buyers.
However, the success did not last, and Ford failed to repeat the same story with subsequent products.
Now, it has decided to continue seeking a foothold in the tough market, where General Motors abandoned efforts last year.
The potential reward is strong. India is expected to surpass Japan within a few years as the world’s third-largest vehicle market, and sales are projected to double to 6 million a year.