Good News: Ford plans to cut prices of its cars

Thanks to the intense competition in the Indian Auto industry, the American car maker is all set to reduce prices of its cars. Ford currently sells the Figo small car, Fiesta classic, new Fiesta Sedan and the Endeavour SUV in India. Ford has been trying hard to increase sales and is trying to increase its market share.

The company launched the Figo 2009 which helped the company increase sales and reach masses. Sales of Ford India – a wholly-owned subsidiary of Ford Motor Company – had declined 4% to 75,604 units in the first ten months of the current fiscal even as Indian passenger vehicle market grew 9% in the same period. The company has been facing tough times with limited car portfolio and higher price bands.

The sale of its new Fiesta sedan remains sluggish since launch in July last year, with less than a thousand units selling each month. It is perceived as an over-priced car at 8.25 lakh (ex-showroom Delhi) compared to its competition- Hyundai Verna, Honda City and Volkswagen – which start at 6.99 lakh (ex-showroom Delhi) and sell in much higher numbers in the Indian market. The company is now offering discounts of up to 75,000 on the new Fiesta for competing with its lower-priced rivals.

The discounts have not helped to increase its sales.

Mr. Nigel E Wark, executive director (marketing & sales), Ford India said: “There is scope for reviewing our product prices as local market dynamics are changing so fast. While we continue to go strong on the Figo hatchback, prices of other products need to be rationalised in tune with new launches in the market and increased competition.” He, however, did not give any timeline or quantum of change on prices contemplated by the company.

Honda followed a similar strategy with the City and Jazz which resulted in a sudden surge in sales. Other car makers are luring customers with huge discounts and freebies to increase sales.