Aggressive Ford EcoSport pricing can alter Motown landscape

Ford India has gone all-in.

After years of blundering on its marketing strategy, the US carmaker has delivered a whopper.

An SUV for Rs 5.6 lakh!

Which is perhaps the exact reaction the beleaguered Ford is seeking en route to much-sought acquittal in the Indian car buyer’s mind.

In the recent past, the company has been roundly disapproved for the way it priced products such as the new Fiesta, which remains a great car by any yardstick.

Such strategic mis-calculus has meant Ford’a India operations have been under pressure. Sales fell 16.2% last fiscal — or by about 15,000 units — to 75,771.
Even its volume-car, Figo, clocked a 13% fall in sales.

Those bitter lessons learnt, and a lot of localisation after, Ford has come up with such a pricing, the sub-4 metre car will be a game-changer not just for itself, but also a range of rivals who are far ahead in the volume game.

Ford said the petrol base variant of EcoSport will cost Rs 5.59 lakh ex-showroom Delhi, and goes up to Rs 844,990, while the diesel one comes with a Rs 6.69 lakh sticker.

At those prices, Ford is targeting customers looking to buy in a lot of segments: sedans, hatchbacks and compact SUVs.

Puneet Gupta, principal analyst, India Automotive, IHS, said on the face of it, Renault Duster may be affected, but it won’t be a significant dent.

“But it is going to be worrisome for others such as Maruti Suzuki, Honda and Hyundai because the pricing makes EcoSport a compelling alternative in a wide range, including small cars and compact sedans. Cars such as Hyundai i20, Volkswagen Polo, Honda Amaze can come under pressure,” Gupta said.

Vinay Piparsania, executive director, marketing sales and service, Ford India, said from a marketing point of view, pricing is important for the overall positioning of a product.

“The decision on pricing was made based on our research and market feedback, and to ensure we make it compelling for customers,” he said.

Indeed.

Piparsania said the company identified “a white spot” in the SUV category -- where customers had to go for hatchbacks or sedans in a given price range.

“We are hoping to establish a new segment with the EcoSport,” he said.

According to industry experts, Ford is estimating to sell around 50,000 EcoSports this year, which may go up to 100,000 units in the next year.

“There has been a good amount of footfalls at Ford showrooms. We expect it to contribute at least 65% of the overall sales of Ford,” said IHS’ Gupta.

Ford will make the EcoSport at its Chennai plant and another one coming up in Sanand. The company is also looking at exporting it including to developed markets such as Australia, Taiwan, New Zealand and parts of Europe.