How many times have you seen a Ford being driven around the Indian streets?
A rare sight, isn’t it?
That’s because even after being in India for decades, Ford could command only 1.42% of the market share!
Ford introduced the concept of a ‘moving assembly line’ to the world. Henry Ford broke down the process of car manufacturing into several tasks and trained one person to do just one task. The process made the workers more agile. This new way of management, combined with conveyor belts in the factory premises reduced the time to build a car from 12 hrs to 1.5 hrs.
Ford is one of the most iconic brands worldwide. Yet, in India, it’s been operating at 20% of its capacity with losses running into $2 billion in the last 10 years. What went wrong?
Pulse of the market
Paisa Vasool is what Indians look for in their purchases. What’s the mileage of the car; Is the maintenance of the car going to be easy; Is the car tough enough for the Indian roads? These criteria gain precedence over everything else.
Guess the brand that checks all these boxes and sells the maximum number of cars in India?
Yes, Suzuki: The most preferred brand for Indians.
But unfortunately, not many could relate to Ford’s offerings. As per a Quora user, the driving dynamics offered by Ford is brilliant, but maybe that’s not what an Indian user is looking for.
They want their cars to be loaded with features, they want variety. Ford sells only 5 models in India, while Maruti Suzuki has 15 models for users to choose from.
Well, Ford is not the only global brand that is exiting India. General Motors and Harley Davidson exited some time back. Last year, Toyota Motor Corp. said that it won’t expand further. Why so?
High Tariffs
Here’s what the chairman of TVS Motors has to say,
“The basic mode of transportation for the country is being taxed at 28% GST, equal to that of a luxury product. I would like to ask, are we being recognised? Is the automotive industry being recognised for what it has contributed to employment, to revenues, and to earning of foreign exchange?”
Maybe the global brands would have been more successful with a lower price tag. Or maybe it’s all just a way to shift blame elsewhere?
Well, well. The government has its own reasons for charging a high tariff.
The GST on electric vehicles is 5%. It’s a kind of sin tax that is being charged on fuel vehicles. The government wants the customers to buy EVs and for car-makers to increase their focus in that direction.
So, is it justified for car-makers to crib about affordability hitting the demand? Shouldn’t they be focused on contributing to the environment like they are contributing to other areas of the economy?
What are your thoughts?
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