New Delhi: Henry Ford said his customers could have their Model Ts in any colour so long as it’s black, but Indian buyers are proving to be tough customers.
A survey conducted by Ford India Pvt. Ltd over two years found that customers are drifting away—whatever the model, colour or specifications.
The company’s next generation hatchback Figo, barely a year old, sells less than the previous model that sold around 1,200 units a month before it was phased out. Sales at Ford India have declined from 98,537 units in 2010 when it introduced the made-for-India Figo in the market, to 79,944 units in 2015 -16.
“Figo is selling less than its predecessor. We started with 7,000-8,000 units a month. We came down to 1,200 a month. Today, my new Figo is doing less than that. Why is that? Nobody has an answer to that. Where are the people who used to buy the Figos?” asks an exasperated top official at Ford India, requesting anonymity.
The survey’s results, which pointed to the trust deficit with buyers, have prompted the firm to roll out the auto industry’s biggest brand transformation campaign estimated at Rs.204 crore, said three people in the know of the matter. None of them wished to be identified.
The last time the Indian automobile industry saw such heavy-duty marketing was in 2011 when Delhi-based Hero Group spent Rs.175 crore to build the Hero MotoCorp Ltd brand after its separation from Honda Motor Co. on 16 December 2010.
A Ford India spokesperson confirmed it has already rolled out a multimedia brand campaign. “The campaign encompasses the entire gamut of the Ford portfolio of products and services—promising trust and transparency as experienced in a family,” the Ford spokesperson said in response to a Mintquestionaire.
As part of the campaign to regain customer trust, Ford will put a cap on the routine expense for a car service. If a customer is charged more by the dealer, the company will reimburse the entire amount and initiate an inquiry against the dealer concerned. This will help customers know the cost of periodic maintenance even before making the booking.
Ford India also proposes to put costs of all its parts on its website and promises to have a car serviced in 90 minutes. Like a phone repair shop, it will also offer a loaner car to the customer if the service takes more than 24 hours.
A second company executive said that according to the survey, trust deficit was a problem not just with Ford India; several top brands are not trusted in terms of service charges, the executive added.
To be sure, meeting the promises on service charges and parts will require additional investments from Ford that may also impact its margins.
According to Avik Chattopadhyay, co-founder of brand strategy firm Expereal, the future of Ford in India does not lie in merely fixing service and spare costs or loaner cars. It lies in building the basic relevance of the Ford brand in India.
“Quite frankly, the lack of a ‘brand’ (is plaguing Ford in India). Currently, Ford is just a name that makes quite a few passenger vehicles, some of which are definitely good. Beyond that, the name means nothing,” Chattopadhyay said, referring to some of the successful Ford vehicles such as the Ikon, Figo and EcoSport.
“The day it decides not to be everything to everyone, it will have a better future than what it has right now,” Chattopadhyay said. Such after-sales exercises have been done by others too, without the desired impact, he added. “Ford’s 90 minutes may be upstaged by Toyota’s 75 and very soon Maruti’s 60! So where does that land you?”
Ford is aware of such scenarios. “The initial reaction is that it is a shallow promise. For us, it is about unlearning what we know already,” said the second executive quoted in the story.
To be sure, Ford has around 20 years of experience in selling cars in India. The company will look to carry that forward.