FORD FIGOed it out in INDIA
It was a great learning experience developing this case study under the able guidance of Mr.
SANJIT KUMAR ROY. We express our gratitude and sincere thanks to you sir.
Without his active support, guidance and encouragement the project would not have been on
the lines where it is. We are obliged for all the support, he provided to us and co-ordination
in providing the study material which has helped tremendously to make the project
informative and comprehensive.
“Our exciting new Ford Figo shows how serious we are about India. It reflects our commitment
to compete with great products in all segments of this car market. We are confident the Ford
Figo will be a product that Indian consumers really want and value.1”
Mr. Alan Mullaly President and CEO, Ford Motors
“The Ford story is not about supporting the domestic market, but overseas too. I am excited. In
the very near future, we will be sending the first load of Figos to South Africa. That is the first
overseas market. In the next 3-4 weeks, we will announce the names of other markets where
Figo will be going. They are mainly in the Asia Pacific and Africa region and a couple of other
areas as well2”.
Michael Boneham, President and MD, Ford India.
Introducing the cool factor
In the automobile market, the success depends on the ability to get the right product into the
market at the right time for the right segment. This is something that FORD, which is one of the
world’s largest and most successful auto makers, had failed to do in INDIA, for about a decade,
as till now ford was offering mid size sedans and SUVs and nothing in the small car segment
which forms nearly 70% of Indian car market3.
Realizing the need of hour Ford introduced FIGO, the first hatchback out of the FORD stable in
INDIA. It was launched officially on 10 March 2010 4by Michael Boneham, President and MD
FORD India. Ford happens to be an American auto major. But surprisingly, the Ford Figo has not
premiered in its fatherland.
Ford India Executive Director (Marketing, Sales and Service) Nigel Wark said, “For years, we
have been seen as offering only premium priced products in India, and that has kept us as a
small player operating in only 20 per cent of the market. With Figo our customers will see a
premium product at an affordable price.5” He knew,this may prove to be the golden goose for
the company in INDIA, which since its entry in INDIA had been facing average sales.
FIGO which in ITALIAN stands for ‘cool’6 was targeted mainly for the youth of the country, with
a new contemporary shape and large sized windows and attractive colors. It was first launched
in fluorescent green color which symbolizes the youth and freshness. Many feel it comes from
the famous “Go Fida” tagline given to the Fiesta.
Figo is said to be built specifically to fulfill the needs of small car buyers in India. It is
manufactured in Chennai, Tamilnadu, India only. Ford wants to make an entry into the compact
car segment, to compete with the likes of Hyundai, Maruti-Suzuki, Tata Motors and General
Ford's introduction of the hatchback has driven company sales to levels never seen before.
Riding on the success of the recently introduced Figo, Ford's sales in India have skyrocketed to
32,755 units through the first half of this year compared to just 13,897 units sold in the first six
months of last year.7
The Ford group
World's fourth largest automaker, Ford Motor Company, was founded by Henry Ford and
incorporated on June 16, 19038. Ruling the automobile sector for over a decade, the company
had a modest start with a capital of just $28,000 from 12 investors. In the early years, the
company produced just a few cars a day at its factory on Mack Avenue in Detroit, Michigan,
The year 1913 added further success and increased the productivity of the company. It was in
this year that Ford introduced and implemented the use of the ‘moving assembly line’. The new
technique gave the workers the liberty to stay in a single place and execute a series of similar
tasks repeatedly on a number of cars at the same time. This method improved and made the
production process efficient. Also known as Fordism, the method helped the company conquer
the market with its range of affordable vehicles. By the advent of the First World War, Ford
Motors produced half of the cars sold in the American and English market. Ford also facilitated
the production of many cars and trucks for military purpose as well.
In 1922, Ford purchased the Lincoln Motor Company which helped the company in the
production and introduction of luxury cars. With the increased popularity and productivity,
Ford became the largest assembly plant in the world and by the Second World War; it produced
not only the standard military vehicles, but also B-24 Liberator bombers and tanks. The World
Wars had no negative impact on the company; rather it gave the company an impetus for
growth and development. Ford Motors launched many famous models in the 1950s and the
1960s, like the Thunderbird in 1955 and the Mustang in 1964.
One of the most important factors that contributed to the development and expansion of Ford
was that it continued to develop and implement the latest technologies in its cars. In 1979, Ford
acquired 25% stake of the Japanese carmaker Mazda, while in 1987 it bought Aston Martin.
Two years later, in 1989, the company acquired Jaguar. The acquiring spree continued as the
company took over Volvo in 1999 and Land Rover in 2000. Ford celebrated a successful 100 th
year in the market in 2003 with the release of Ford GT. The event also marked the release of
limited centennial editions of some Ford vehicles.
Ford is currently the second largest automaker in the U.S.9 and the fourth-largest in the world
based on number of vehicles sold annually, directly behind Volkswagen Group. Ford had
revenues worth US$ 164.5 billion in 2003 and is spread across 200 countries with over 327,000
employees. Ford was the seventh-ranked overall American-based company in the 2008 Fortune
500 list, based on global revenues. Ford sells vehicles under various brand names such as Aston
Martin, Ford, Jaguar, Land Rover, Lincoln, Mercury and Volvo.
Ford has faced certain financial problems in recent years that led to the selling of certain brands
like its former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of India in
March 200810. In 2010 Ford sold Volvo to Zhejiang Geely Holding Group.
Nonetheless, the company has continued to prosper and hold an important position in the
world automobile market.
In a bid to expand its overseas operations and enter the new markets, Ford started exporting
some of its car models to Japan. Until 1939, before World War II, the company sold about
10,000 Model A Fords annually in Japan. When Ford reentered the market after the war, in
1953, it imported only a limited number of cars each year. The Japanese market dynamics were
not as predicted by ford and various factors like the prices of real estate were so expensive in
Japan, most auto dealerships did not resemble American dealerships with their large buildings
and massive car lots. The foot hold of local players provided the biggest hurdle in the entry of
new foreign player in the market. Evaluating the various options Ford decided to close its
operations in Japan then.
After a detailed research on Japanese consumers, it analyzed that the typical Japanese
consumer was less interested in power car drives than in how it looks. Because Japan had such
a well-developed public transportation, many Japanese used that system for day-to-day travel.
The Japanese treated their car as an ornament to be polished and cared for but used only
Ford in a pursuit to tap this opportunity and to reenter the Japanese market, after learning
from its previous mistakes, acquired some stakes in Japanese manufacturer Mazda in 1979;
Ford began selling Mazda's Familia and Capella (also known as the 323 and 626) as the Ford
Laser and Telstar, replacing the European-sourced Escort and Cortina.
The new Mustang represents Ford's flagship model in a new line of cars it introduced in Japan
in mid-1994. Although Japanese cars had their steering wheel on the right-hand side of the car,
Ford's Mustang was a left-hand-drive model that targeted a high-profile niche market.11 Ford
positioned the Mustang squarely against Nissan's Z cars and Toyota's Supra, cars that have
dominated the 'muscle car' niche in Japan. Along with the Mustang, however, Ford introduced
three right-hand-drive models - Probe, Laser, and Mondeo - that targeted the compact-sedan
market long ruled by Honda's Accord.
This segment accounted for one-third of the Japanese market. Ford produced these new 'world
cars' as part of a 6 billion Dollar development effort. This was the first time any American car
company has offered right-hand-drive cars in Japan.
Over increasing competition and economic downturns had its impact on the business of Mazda
and it struggled to maintain its revenue rolling in. Ford helped its Japanese partner in 1996 by
buying more stakes in it, and assisted in a complete restructuring of the business in 2000 in
order to counter several years of slow and steady decline, especially in the domestic Japanese
Effect of Recession
The Global economic melt down had major impact on the business around the world and
automotive sector was one among the majorly hit sectors. Among the major Autos players Gm,
Chrysler etc faced the heat. It was due to well managed and strategically correct business
decisions that ford, during the economic recession was the only Automobile manufacturer that
did not wait for the bailout, rather churned cash from its own reserves to maintain cash flows
and the business.
In one such advancement, ford in order to increase its liquidity and maintain its cash reserves it
reduced its 33.4% controlling interest in Mazda of Japan, to a 13.4% non-controlling interest in
With economy coming up again the spending power has increased and the first sector to show
signs of great recovery was automobiles. December month sales figures for many autos were
significantly higher than previous months and companies have geared up with new models and
releases to capitalize on the feel good factor in the market.
The small car segments is heading for a stiff competition due to new models planned by FORD,
Nissan and Volkswagen the models include Figo from FORD , MICRA from Nissan Renault and
much awaited POLO from Volkswagen.
FORD in INDIA
Ford started its innings with the Mahindra-Ford joint venture formed in 1994, which produced
the Escort out of M&M Nashik plant.13After meeting initial success, sales of the Escort was
finally replaced by the Ikon in 1999.
The Ikon marked a new beginning for Ford in India. It rolled out of the Marajmalaingar plant
near Chennai and by now, the company had parted ways with M&M and was renamed Ford
India Ltd in 1998. The Ikon was the first model by a multinational to be developed specifically
for India. Though it was based on the Fiesta, it was a unique body style and was offered and
was offered with an option of three engines, including a diesel. The car was a big hit. The Ikon
underwent several face-lifts and price cuts to keep demand high. However, fresher competition
and a reputation for high-maintenance saw sales gradually decline. After the arrival of the
modern and highly-capable Fiesta, another made-for-India car, with state-of-the-art engines,
the Ikon has been marginalized. The Fiesta has picked up where the Ikon left and is selling well.
Though the Ikon and Fiesta have been the mainstays of Ford’s production in India, the company
has had limited success with other models. The Mondeo, launched in 2001, was a very talented
car but was simply not suited to Indian conditions and earned a reputation for being exorbitant
The Endeavour SUV was launched in early 2004 and has sold well for its niche. In 2004, Ford
launched the Fusion, which has received a lukewarm response though the recent diesel variant
has perked up sales. . The Endeavour has recently been upgraded in 2007 and this has boosted
the appeal of the big SUV. Presently offering five different models, Ford India Limited (FIL) is
catching up fast with the Indian consumer.
During all these years Ford wasn’t able to dominate the Indian car market as it was only
catering to upper middle class and rich urban population with its offerings and the Indian
customer was very reluctant to upgrade his car resulting in no repurchase. This segment only
constituted 25-30 % of total Indian car market segment. Moreover the uncertainties and
fluctuation in the Indian car market also played a major role in their slow growth.
The major key players in Indian market were Hyundai, Maruti-Suzuki, and Tata Motors which
were catering to almost 50% of the entire market here. The main reason being the major
population chunk was middle class which will generally go for hatchbacks as that fits well in
their budget and is considered as best value for money.
Ford envisioned major scope for growth in Indian car market looking at India’s growing
economy and induction of more and more urbanization. They were here to stay for they had
invested 12 good years in understanding the market here and growth opportunities. This gave
birth to idea of getting a hatchback specially made for Indian market and hence FIGO was
Introduction of Figo in India
Ford unveiled its small car for India, called the Figo, which means “cool” in Italian, on 10 March
2010 in florescent green color positioning itself for young urban working population. The Ford
Figo has a new contemporary shape & large side windows that makes it distinctly different from
other brands in this segment.14 It will be powered by 1.2 liter petrol or 1.5 liter diesel
engines. Figo is said to be a redesign of the 5th generation Fiesta that has been on sale for
a decade. It has been built specifically to fulfill the needs of small car buyers in India. It is
manufactured in Chennai, Tamilnadu, India only.
Ford Figo is designed and engineered by Ford Australia.15 The slim upper grille and large lower
grille, body colored bumpers with fog lamps create a magical view that pleases the eyes. Figo
was very much in sync with the Ford vision of “One Ford” and the famous Ford tagline “Make
The Figo has got great big-car feel. The ride is one of the best in class, good at both low and
high speeds. It’s very stable at three digit speeds and you can see Ford’s ‘driver’s car’ DNA in it.
The steering is light and nicely weighted for city use.
The Figo is one of the biggest B-segment cars in India. It’s longer than the Swift, has a longer
wheelbase than the Fusion. Interior space is good, the seats make up by being very supportive,
and seat height and back support are good as well. It has an aesthetic design and interiors are
magnetizing to eye. After the florescent green colored Figo made waves, customer was given an
option to choose Figo in 7 more colors. The various colors are: Diamond White, Panther Black,
Moon Dust Silver, Squeeze, Colorado Red, Sea Grey and Metallic Chill.16
The central console houses a music system with Bluetooth compatibility and auxiliary in
coupled with four speakers on the titanium, the low and mid range sound quality and the bass
is quite good. The Bluetooth can pair up to five phones at a time; however, only one can be
operational at a given time. The user can access his phonebook, call logs and even the redial
numbers through the system itself. The speed sensing volume comes at a standard, which
means the sound automatically increases with speed.17
In order to change the perception for ford cars being expensive to maintain FORD used long
lasting parts. In testing phase, it was ensured that the components must pass a minimum of
100,000 kms during durability runs .FORD reduced its costs by achieving economies of scope by
manufacturing the parts locally rather than being imported and as a result FIGO has 75%
localized content . In case of accident FORD has ensured that it is possible to change smaller
parts rather than the entire body structure moreover, a special care has been taken to ensure
that cost of parts (bumpers)which are more prone to get damaged in an accident are kept low.
Mileage, Average and Fuel Economy
Ford Figo is available in the Indian auto market in both petrol and diesel trims. The petrol
variants of Ford Figo are packed with the all new 1.2L, 1196cc, SEFI engine with five speed
manual transmissions. The vehicle gives a standard mileage of around 12.5 kmpl mileage in the
city while on the highway it offers mileage around 15.5kmpl. The engine also meets with BS-IV
(Bharat Stage - IV) emission norms.
On the other hand, diesel variants of Ford Figo are powered by Ford’s popular 1.4L, 1399cc,
Duratorq diesel engine which has gained popularity since it delivers excellent drivability and
fuel economy. This engine too, satisfies the BS-IV emission norms and delivers excellent power,
performance and mileage. The 1.4L diesel engine offers a mileage of around 14.5 to 15kmpl in
the city while on the highway it delivers a mileage of 18.5 kmpl. A very interesting feature that
has been added to Ford Figo is the 'Distance to Empty' feature that informs you how many
kilometers you can go with the available petrol in the tank.
Ford was doing good business till now in India but it wasn’t catering to the major segment of
Since the launch of the Ford Ikon way back in 1999 speculations were on as to when Ford would
introduce a small hatch. It's not that Ford cars were not selling, and indeed the success of the
Ikon and 1 lac sales of the Fiesta are proof to the contrary, but Ford were playing with a mere
A majority of Indians, when looking for a new car will be thinking of getting a 'Small Car'. Many
government regulations were doing good to encourage consumers for B segment cars. As a
result, this is the segment most manufacturers have to have a presence in, in order to have an
overall healthy market share.
Moreover Pricing plays another big factor whether a car will sell in numbers (just take for
instance the Swift or the i10) or will get stuck at modest or even small numbers (the Fabia and
the Jazz for example). Indian mentality is set at comparing how cheap the car is to its
competitors, and at times providing more features for a premium can really backfire.
Ford took note of these two points (especially after the Fusion did not do too well) as once
Michael Boneham, President and MD, Ford India said in an interview, “If you aren’t catering to
more than 70 % of the market, you are not present in the market” 18and finally Ford launched
the Figo in March 2010 at a base price of 3.6 Lakh.
Ford have kept only the most necessary features and used smart and innovative designs like the
distinctive human-eye shaped headlights, to enhance the design appeal and reduce the cost of
the Figo, but fortunately as cheap quality was not what Ford had in mind while planning the
Figo. The quality of the Car’s Parts and the fit and finish are right up there. The company’s
proclaimed aim was to offer a Quality Product at an Affordable price, and with 25,000 cars sold
in just 100 days19 it indeed seems that Ford has got it just right with the Figo.
The company has taken the price of the base variant of Hyundai i10 as its benchmark for the
petrol variants of Ford Figo that is priced at Rs 3.5 to Rs 3.6 lacs. While the diesel variants of
Ford Figo are priced in the range of Rs 4.5 to Rs 5.45 lacs. These exceptional price ranges for
such a large and stylish premium hatchback model has given it a good start.
Ford entered the arena of B segment car line when the competition was at its peak with major
players like G.M, Volkswagen, Maruti and Tata already getting into the consideration set of
target audience which FORD was planning. Now the major challenge for FORD was how it grabs
the eyeballs. The main target audience for FIGO was the young working people and urban
INDIAN middle class families and moreover to tap the emotional chord of INDIAN consumer the
green color which marks growth, prosperity and creativity in INDIAN culture, the FIGO was
launched in fluorescent green color which also showcased its youth and fresh appeal.
Print media, television and internet were the major source of advertisement. FORD tied up with
big advertising market players like JWT20 to make sure that there positioning is communicated
effectively.The viral marketing campaign such as the one done on the facebook and orkut to
attract the young users were very effective. Moreover, advertisements like the ones done in
times of India in which users were asked to sms ‘FIGO’ to a number wherefrom they could
download an application for free which enabled them to view animated figo once there
cameras were focused on the print ad,this was a new kind of ad campaign which attracted
many readers. (exhibit 3)To attract the creative class within the young working INDIANS some
advertisements were showcased in which peacock was shown get envious of FIGO’S vibrant
color and hitting it with its beak.
As a part of its promotional strategy FORD made bookings for test drives available on the
internet at many famous automobiles websites and social networking sites as facebook and
orkut. It also used these sites as an advertising channel with the official communities of FIGO
various discussion pages abuzz with reviews from bloggers, auto experts and customers. FORD
also started competitions on these sites like best reviewer of the week and a contest between
auto bloggers wherein the best one gets FORD FIGO as the prize.
They also displayed pictures and videos of FIGO in serene locations and couples sitting besides a
FIGO near the sea. The communities also gave a driving or maintenance tip every three –four
days giving a message that FORD cares for its customers. A good example being a tip given that
gave information about how to keep the windows frost free in rainy seasons while the a/c is on.
Figo turned out to be the trump card for ford for it gave Ford the much needed grip in Indian
market. Though the other cars from ford stable were doing average business but it was unable
to make it mark. Figo did a U turn of fortunes for Ford in India.21 The sales figures for Ford
started rising exponentially and Figo was the major contributor. Ford Motors India posted a
remarkable sales figure of 22,858 units in the first quarter of 2010(April-June) as against 6,184
units sold in the same period in the previous year largely attributed to FIGO.
Figo has set records of a sort, with over 10,000 orders booked in the very first month after it
went on sale. Over 25,000 units of the Ford Figo were already booked within 100 days. For the
month of June 2010 the sales went up by whopping 267%, where the company clocked total
sales of 7,269 units, compared to 1,982 units sold in June'2009.
As on 1st September 2010, ford has approximately sold 40000 units of Figo and is selling for the
already booked orders. It tapped the right cord of Indian consumer and consumers didn’t mind
waiting for more than a month also for its delivery. Currently the waiting period of Ford Figo is
four to six weeks and it intends to reduce the period to less than four weeks. Ford had also
announced that it will be increasing Figo’s price in coming few weeks. Ford is also adding new
dealerships in its network to increase the count up to 200 from its current 166 dealerships. 22
Figo not only won the hearts of Indians but also was praised by critics as well. FIGO got the best
diesel car award from ziggwheels.23It indeed had a great run in such a short span of time.
After the overwhelming response of Figo in its initial phase, now it is time for ford to analyze
and decide how it continue its present aura and how it capitalizes on the impetus provided by
Figo. So they needed to devise a clear roadmap of future course of actions and their sequence.
Indian market strategy:
New Model Variants: As said by Ford CEO Alan Mullaly “The Figo shows how committed we are
about Indian market”, continuing on that ford plans to launch more variants for B- segment
cars in India so as to increase its market share and leverage on the success of Figo.
New regional markets: Looking at the present web of dealership what Ford currently have, it
is very low as compared to their competitors. They will have to increase their dealership
network and try focusing on areas which they haven’t touched till now.
Export market strategy:
After receiving the applause in India, Ford believed that it could generate similar response in
export markets as well. In order to take this opportunity ford classified the Nepal and South
Africa as emerging and hence as potential markets. Though the entire production will be done
in India and then will be exported to South Africa and Nepal. There won’t be any changes in the
Figo as such as of now.
Looking at the kind of response Figo is getting and the demand from the market, Ford is
planning to double its manufacturing capacity at its Chennai facility to 200,000 units per annum
by 2010 and is doing an investment of $500 mn, 24 to take on its competitors in India as well as
in other markets as Ford plans to export the Figo to 50 new markets including Mexico, North
Africa and middle east from 2011.25
Ford can Leverage on the elements which contributed to Figo’s success here in India and can
develop its coming models on similar lines and hence generate the same hysteria.
As said by Alan Mullaly, Group president and ceo ,”India is a really important market for us. We
love being here. We have got great operations here. We can continue bringing more and more
of our Ford products to the Indian customers. If you look at the overall market in the Asia
Pacific, India and China will be the fastest growing market for us going forward. Adding to it
John Hinrichs, President Ford, Asia pacific and Africa, said, “Ford motor company will launch 8
new vehicles in the middle of the decade”.
As for India, it has a tremendous operations force. It will be one of our hubs. We have got
tremendous manufacturing capability here. All the units of the business are pretty welldesigned and integrated with our entire global production system. So, India will continue to
take on more importance in Ford worldwide.
pricing (ex-shoroom Delhi prices)
1.2L Petrol LXi
1.2L Petrol EXi
1.2L Petrol ZXi
1.2L Petrol Titanium
1.4L Diesel LXi
1.4L Diesel EXi
1.4L Diesel ZXi
1.4L Diesel Titanium
Ford Figo Petrol LXI
It is the base variant of Ford Figo which is equipped with 1.2L petrol
engine and it carries basic features that any B segment car offers.
Ford Figo Petrol EXI
It offers some additional features that are Passenger side ORVM (Out Side
Rear View Mirrors), Full Wheel Covers, Front Power Windows, Remote
Trunk Open, Fabric Insert on Door Trims, Passenger Vanity Mirror on Sun
Visor, Removable Parcel Tray, Music System, Central Locking, Keyless
Entry and Engine Immobilizer.
Ford Figo Petrol ZXI
Additional functionalities which will be available with this variant are
Body Colored ORVM and Door Handles, Chrome Finished Front Grille,
Side Repeaters and Tailgate Opener, Height Adjustable Driver Seat,
Automatic Adjustable ORVM, Cargo Area Lamp, Phone Interface through
Bluetooth, Tachometer, Rear Wash/Wipe and Defogger.
It is the top end variant of Ford Figo which is loaded with few more
features that are Six Speed Variable Intermittent Front Wipers, Anti Drip
Wiping, ABS with EBD and Dual Front Airbags.
Ford Figo Diesel LXI
It is the base diesel variant of the car. It offers same features as like “Ford
Figo Petrol LXI” only the difference is engine. It is loaded with 1.4L,
Duratorq diesel engine to offer excellent mileage and engine
Ford Figo Diesel EXI
It offers same features as like “Ford Figo Petrol EXI” only the difference is
its 1.4l Duratorq diesel engine.
Ford Figo Diesel ZXI
It offers same features as like “Ford Figo Petrol ZXI” only the difference is
its 1.4l Duratorq diesel engine.
Diesel It offers same features as like “Ford Figo Petrol Titanium” only the
difference is its 1.4l Duratorq diesel engine.