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| Edited By: Sindhu Bhattacharya |Source: DNA |Updated: Mar 18, 2018, 03:43 AM IST
One by one, automakers seem to be shying away from the ultra-low-cost car market, persuaded perhaps by the tepid response to the Tata Nano.
The latest is Ford Motor Company, which just announced a Rs4,000 crore plan to set up a manufacturing plant near the Nano factory in Gujarat. To be sure, the focus of the world’s fourth-largest carmaker in India remains the small car, but the Nano segment is a big no-no segment.
Reason? Buyers are uptrading, for one. That is, going for costlier/fancier cars.
Ford India president Michael Boneham said more than half of the buyers of Figo, the company’s premium hatchback, are first-timers.
“So it’s obvious they are jumping straight to a premium car,” he said.
Joseph R Hinricks, president, Ford Asia Pacific & Africa, said the company no longer has a plan to build a car in the $3000-$3500 (sub Rs2 lakh) price range.
“The Tata Nano has probably not achieved the volumes the media thought it would. Ford stands for driving dynamics, safety etc. You have to stand for something as a brand. We want to make sure our brand has continuity in India,” said Hinricks.
Ford joins General Motors and Renault-Nissan in junking the ultra-low-cost car plan.
GM India president and managing director Karl Slym recently said plans to launch a car smaller than the Spark hatchback have been shelved.
“It (small car) was under discussion when the Rs1 lakh car (Nano) came in. We have reached a decision point that it is not right for us,” Slym said recently.
The development of a ultra-low cost car by Bajaj Auto for Renault-Nissan also appears to be in jeopardy, partly due to inability to source parts at low costs.
Ford is also cautious about entering the luxury space. Given its tough financial situation, the US carmaker had sold off many marquee brands such as Jaguar, Land Rover and Aston Martin over the last few years and is left with only the Lincoln brand in its global portfolio.
Hinricks said the company is committed to rebuilding this brand and possibly, some time in the future, it might find a place in India too.
“The luxury car market is growing in China and India but in the near-to-medium term, we will have to focus on the brand Ford ... we continue to invest in Lincoln and you may see it here in future sometime.”
