Registration of SUVs and other diesel cars with an engine capacity of 2,000 cc or more is banned in NCR till March 31.
Despite the bad press diesel is getting of late, Ford India on Wednesday drove in a premium sports utility vehicle, New Endeavour, betting that sales in smaller Tier 2 and 3 cities will offset a loss of volumes in the biggest market in National Capital Region (NCR).
Registration of SUVs and other diesel cars with an engine capacity of 2,000 cc or more is banned in NCR till March 31.
Anurag Mehrotra, executive director (marketing sales and service), Ford India, said, "By expanding service outlets in such cities we are exploring untouched markets. These smaller cities currently contribute 40-50% of Ford's sales volume across segments."
"We will be adding more service centres in sale outlets as they will contribute a significant portion to the volumes," he said.
At present, Ford India has 300 service centres across 185 cities. "The cost of customer acquisition in smaller cities is low, the dealer profitability hence tends to be higher. The market share of such markets are 2 to 3 times higher than that of Tier 1 cities."
The company is looking for expansion in smaller cities that have population of over a lakh. Ford is working on an analytical model which would decipher economic growth of a city. There are towns which are nowhere on the map, but their economic level is very high, it said.
The first Ford Endeavour, launched in India in 2003, was a truck-style SUV. This is a completely new avtar of the old version at a starting price of Rs 24.75 lakh (ex-showroom, Mumbai) giving tough competition to Toyota Fortuner, Hyundai Santa Fe and other premium SUVs in the Indian market. This marks the third launch for Ford India in this fiscal.
Nigel Harris, president and managing director at Ford India, said he is projecting the premium SUV market in India to touch 95,000 units by 2024 from 18,000 units on 2015.
So far, Ford has invested $2 billion in India on manufacturing facilities. It produces range of products including Ford Fiesta, Ecosports and Endeavour at its Chennai integrated manufacturing plant.
The Endeavour launch scheduled for December 2015 was delayed due to floods in Chennai as the company had to suspend operations for more than three days. Around 5,000 units have taken a hit due to suspension.
Apart from this, the company has put additional $1 billion in its Sanand, Gujarat, manufacturing facility. With this new set-up, Ford has doubled its annual installed capacity to 610,000 engines and 440,000 vehicles.
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