Ford India in 2009 (A): Need for a Strategy Change?
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Case Code: BSTR370 Case Length: 18 Pages Period: 2004-2009 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.300 Organization: Ford India Pvt. Ltd Industry: Auto and Ancillaries Countries: India Themes: Business Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
"Our investment plan clearly signals Ford's intent to implement an aggressive and comprehensive growth strategy for the India market. Reaching volume production of vehicles and engines will not only allow us to participate in the future growth of India's auto industry, but really to help drive it, both in terms of domestic sale and export potential."
- Arvind Mathew, President & Managing Director, Ford India Pvt. Ltd., in January 2008.
"We would like to have a strong presence in the small car segment in the coming years and are targeting to capture 15-20 per cent of the market by 2010."
- Sumit Sawhney, General Manager (Sales), General Motors (GM) India Pvt. Ltd., in June 2007.
"Vision (for India): To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016."
- Automotive Mission Plan 2006-2016, Ministry of Heavy Industries & Public Enterprises, India.
Introduction
India, China, and other emerging economies were expected to be the major markets for the growth of automobile sales in the 21st century. Ford Motor Company, a century-old manufacturer of automobiles, was one of the global leaders in the automotive industry.
However, it lagged behind its competitors in terms of sales volumes in the Asian region. For example, though it had entered the Indian auto market in 1995 and introduced mid-sized car models, its sales growth had not kept pace with the growth in the market.
As of February 2009, India had a 3 percent share of the global market for passenger cars and commercial vehicles whereas China's share was 12 percent.4 Unlike the US market, the Indian market for passenger cars was dominated by small cars.
To capture a significant share of this high-volume, high-growth segment of small cars, many companies - both multinational and Indian - were gearing up with new product launches. A strategic decision had to be taken on Ford India Pvt. Ltd.'s course of action for the domestic market, and how it would contribute to the long-term success of the parent company in other emerging markets...
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