Focus to continue on Rs 4-8 lakh segment

N. Ramakrishnan

Chennai, May 19

Ford India prefers to view the Indian automobile market in terms of the price range rather than vehicle size - a hatchback or a sedan - which has been the traditional way the market has been looked at.

It believes that a bulk of the action is going to be in the Rs 4-8 lakh price bracket, a segment that is growing at 20 per cent. "We continue to focus on this Rs 4-8 lakh segment, which we believe is the core of the Indian automotive market," says Mr Arvind Mathew, Managing Director & President, Ford India Pvt Ltd.

Ford India, nevertheless, would study the growth in all segments, including the premium hatchback segment - now made up of Swift from Maruti, Getz from Hyundai and Palio from Fiat.

Mr Mathew told

Business Line

that customers looked at cars based on price rather than on size, which was how Ford India too assessed the market. "When you talk of premium hatchback, I view that as part of the Rs 4 lakh plus segment. I view that as part of my segment. I don't view that as hatch versus sedan."

Would Ford India introduce a small car now that excise duty has been cut? He replied that the company preferred to track sales for at least six months to see if they were sustained. Mr Mathew felt that sales jumped in March following the excise duty cut in the budget, but was not repeated in April. If sales continued to grow at, say, 20 per cent for six months then the company would look at its options and decide on a product given the market conditions.

He was optimistic about Ford India's strategy of having three models in the Rs 4-8 lakh bracket. The Ikon was at the entry-level, Fiesta a premium sedan and Fusion occupied a niche segment, which now small was nevertheless growing, he said.

After the launch of the Fiesta, the company re-positioned the Ikon as a younger brand. Ford India would continue with promotional schemes to reinforce this image of the Ikon and tell prospective customers that they need not really look at a small car or that they could even jump from a motorcycle straight to the Ikon segment, instead of going in for the more traditional route of a small car first.

On the passenger car market, Mr Mathew felt that, given external factors like fuel price hike and a hardening of interest rates, the market should grow at about 7 per cent a year. However, the mid-size segment (or, the Rs 4-8 lakh segment) would grow at 2-1/2 to 3 times more than what the industry would track.

Ford India's plant was running at about 60,000 units a year now and exports, which were flat last year, was also growing.

(This article was published in the Business Line print edition dated May 20, 2006)
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