WHAT THE F...?

Ford has once again banked on the alphabet ‘F’ – this time they call it Figo. But will the Figo brand really be a game-changer for this Detroit giant in India?

The ‘F’ word is critical to Ford. And they make no qualms about it at all. In the world of cars and history of automobiles, if there were to be straws drawn on which car qualifies to be an American icon, there’d be too many who would vouch for the pretty impish lot called the F-Series. The series (of Ford’s full-size pickup trucks) has sold more than 32 million units worldwide since its launch in 1948 (just behind Toyota Corolla, which has sold more than 36 million units in its 44 years journey). But where the F-Series shrivels up the competition is the fact that in the US markets, the F-Series has been the best selling vehicle for 23 smashing consecutive years including the year gone by, with a fantastic share of Ford’s profits coming from the inimitable series.

Inexplicably still, the F-Series is not sold by Ford in India! Or in China! And this despite these two markets being two of the most promising automobile markets across the globe. But however head scratching that move (or lack of it) might be – or might not be, given the per capita dynamics – what Ford is trying to pull off now in India could well define a historic moment of its existence in the subcontinent. And that is the introduction of Figo! The hatchback from Ford’s stable is expected to hit the Indian roads sometime in March this year. With the launch of Figo, Ford is finally making its debut in the A2 segment, through which they are targetting a significant pie (the small car segment constitutes about 70% of the Indian car market). But it’s not as if this wasn’t expected.

The Figo had been showcased in New Delhi in September 2009. And industry watchers surely expect the competition in the A2 segment to get more intense with the launch of not only Figo but also Volkswagen Polo in March this year, adding to the sparks created by General Motors’ Beat that was launched in December 2009. And industry analysts expect the market leader Maruti Suzuki to lose noticeable market share from the segment (though Shanshank Srivastava, CGM-Marketing, Maruti Suzuki India did tell 4Ps B&M, “2010 will be a tough year for Maruti Suzuki. As the competition in the small car market will increase, the company is expected to lose some market share in that category. But it will not be substantial.”)

It’s certainly a news in favour of Ford India, but then one should not forget that players like Toyota and Honda are also all set with their plans for the small car market in the country which make the road all the bumpier for this automotive giant in India. This certainly puts a lot of burden on Figo’s shoulders as far as Ford’s exposure in India is concerned. But Michael Boneham, President & MD, Ford India seems pretty confident when he tells 4Ps B&M. “Figo is a very important product and we expect it to chart a new success story for the company in the Indian market.”

Evidently, Figo will have to work pretty hard to achieve that success. Ford had entered India in 1995 with its globally acclaimed Ford Escort. But as a whole, significant volumes have been absent for Ford in India in its 15-year-long journey. Escort, Mondeo, Fusion, though having a great brand recall, failed to an extent in making a clear purchase impact in the minds of Indian consumers. Ford did stock acclaim with brands like Ikon and Fiesta, but high volumes has been a rarity than a regularity for this American automaker. That said, the company has been able to make a significant impact in the SUV category with its Endeavour brand; but the brand’s smooth run too now is under threat with Toyota’s Fortuner entering the market.

The turnaround that Alan Mulally has crafted for this automaker in US is truly overwhelming, but, in India, Ford still roughly holds only a 2-3% market share. The company sold 29,499 vehicles in 2009 (28,563 in 2008) registering a sales growth of 3% on the Indian turf, which is way below the levels that the market leader Maruti Suzuki or the chaebol Hyundai enjoys in the Indian market. “We haven’t been able to clock high volumes simply because of the fact that we weren’t present in the segment where 70% of the cars are sold in India (read: small-car segment). But with the launch of Figo, we expect to grow rapidly in the Indian market,” says Boneham.

There is credible weight in his argument. In fact, Ford has already invested $500 million to double the annual capacity of its Chennai plant to 200,000 vehicles and is also setting up a facility to make 250,000 engines annually primarily for the high demand that Figo is expected to bring in for this Detroit giant. While Ford has no plans to bring the famous F-Series to India in the near future, Boneham doesn’t completely rules out the possibility of its launch in the long run. “Currently, our focus is on the launch of Figo and ensuring that it is a success in the Indian market. We will launch the F-Series when we believe that the Indian market is ready for such a product.”

Though a considerable lot of what will happen in India for Ford will depend on the pricing and the marketing strategy that the brand pursues in the short run, what would be key learning for Ford – and for Boneham – would be that the reason Maruti Suzuki has succeeded over the years has not been just because of introducing new brands, but because of their clever play between quality of products offered, service support provided, and market grabbing pricing. Not to forget that the legacy of the ‘Indianness’ of the name of Maruti would remain an extremely crucial factor for Ford, one no other auto manufacturer has been able to replicate.

Till that happens, Ford would have to target a hope that Figo provides it leverage to consolidate market shares in the future, rather than attempting to grab market leadership. And of course, then we have the F-Series... but then again, that’s altogether another story!