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Ford India on cost cutting mode – No plans to launch new car till 2020

Ford India has resorted to several cost cutting measures, reveals a report by Times of India. One of the many ways the company is cutting costs, is by not giving increment to employees this year. The company normally offers two annual increments to employees in March and October. This year, the October increment has been scrapped.

In addition to this Ford India is moving out of its more spacious and plush corporate office in Cyber City, Gurgaon to another location in the same city. The new Ford India office is not located in as plush a locality as Cyber City, neither it is as big as before.

The report adds that many of their employees will be moved to the Chennai office. These cost cutting measures began in 2016, which helped the company save 37% in costs as compared to 2015. The cost cutting exercise continued in 2017, which helped save 9% as compared to 2016. This year too, cost cutting exercise is increasing. The company has even slowed down its hiring process with many prime posts remaining vacant.

In spite of being in India since 20 years, Ford has managed to get a marginal share in the domestic market. Dwindling profits in India will also mean that there will be no new car launch from Ford by 2020.

EcoSport continues to be best-selling Ford in India with average sales of 4,000 units a month.

Even as Ford India domestic sales have been found lacking, its export business is doing well and has accounted for nearly 65% of company profits. This makes one think, is the American car maker heading the GM way in India? GM exited India market, but continues to use India as a manufacturing hub. Though they do not sell any car in India, GM is one of the biggest car exporter in India.

Too early to say if Ford will follow the GM path in India or not. As of now, all plans to launch new products have been put on hold, the company will concentrate on facelifts of its current model lineup and on upgrading existing models according to BS VI emission norms which will be coming into the country from 2020. Facelifts of Ford Figo hatchback and Aspire compact sedan are slated for launch in India by the festive season along with a facelifted Endeavour sometime in 2019.

The company along with Mahindra is also working on a new SUV which will be based on the next gen XUV500 and this will be the first product from the Mahindra-Ford joint venture which is also slated for launch only in 2020.


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