Ford Motor Company in India: Developing the Ford Figo

Ford Motor Company (Ford), though one of the global leaders in the automotive industry, found
itself lagging behind competitors in terms of sales volumes in the Asian region, especially in India
since its inception. 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.
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. Ford
realized that a strategic decision had to be taken on the course of action that its wholly-owned
subsidiary Ford India Pvt. Ltd. (Ford India) had to take for the domestic market. Ford did a lot of
marketing research to understand the Indian customer and to find a potential target customer for its
new products. Based on the research findings, Ford India started developing the Figo with the help
of the Australian Ford team.
On September 23, 2009, Ford India unveiled the Figo 1 its first small car. Through this car, Ford
sought to gain a foothold in the emerging South Asian car market. 2 The company said that the
name Figo had been derived from the colloquial Italian for =cool. Figo was eventually launched in
February 2010.
Figo was priced aggressively to attract buyers, keeping in mind the competitors. Ford priced the
entry level model at Rs 3 349,900 for the petrol variant and Rs 447, 900 for the diesel variant. Ford
President and CEO Alan Mulally (Mulally) said, We are confident the Ford Figo will be a
4
product that Indian consumers really want and value.

ABOUT FORD MOTOR COMPANY AND ITS INDIAN SUBSIDIARY

5 as
Based in Dearborn, Michigan, US, Ford was the fifth largest automobile company in the world
6 Founded
of 2010, with revenues of more than US$128.954 billion and about 164,000 employees.
in 1903, the century-old company had a global presence with operations in 200 countries. Fords
brands included Ford , Lincoln , Mercury, and Volvo .

Although Ford obtained significant revenues and profits from its financial services subsidiaries,
the companys core business remained the design and manufacture of automobiles for sale in the
consumer market. Its subsidiary, the Ford Motor Credit Company, extended loans to consumers

1 It

is a four-d oor hatchback, which is a type of automobile design, consisting of a passenger cabin which
includes an integrated cargo space, accessed from b ehind by a hatch or flip-up wind ow. Hatchbacks are also
often called three-doors (two entry doors and the hatch) or five-doors (four entry doors and the hatch) cars.
2
Nik hi l Gu lat i and San tan u Ch ou d hu ry, Ford Targets India Market with First Small Car,
http://online.wsj.com/article/SB125369081200333397.html, September 23, 2009
3
Rs.= Indian rupees. US$1= Rs. 44.89 as on June 8, 2011.
4 Ford's

Global CEO Reveals New Ford Figo Targeting India Market and Export Sales,
http://media.ford.com/article_print.cfm?article_ id=31059, September 23, 2009
5 Bertel Schmitt, Hyundai 4th Largest Auto maker, Overtakes Ford,
http://www.thetruthaboutcars.com/2011/01/hyundai-4th-largest-automaker-overtakes-ford/, January 28,
2011
6
Form-10K. Ford Motor Company,
http://www.sec.go v/Archives/edgar/data/3 7996/000115752311001210/a6622311.htmhttp://www.sec.go v/Ar
chives/edgar/data/37996/000115752311001210/a6622311.htm, 2010
1

for purchasing and leasing cars, and business loans to dealers to stock and sell the companys
cars. 7
While North America and Europe were the major markets for the company, it had a presence in
South America, the Asia-Pacific, and Africa too. The companys revenues from Asia were only
around 5% of its worldwide revenues.
Ford entered the Indian auto market in 1995 through a joint venture with Mahindra & Mahindra
Limited. 8 In November 1998, it received the necessary government approval and increased its
stake in the venture to over 90% from 50%, thus forming Ford India Pvt. Ltd. (Ford India). As of
2009, Ford India sold three sedans the Fiesta, theIkon, and the Fusion ; and a sports utility
vehicle, the Endeavour .9 Ford India manufactured and distributed automobiles made at its modern
integrated manufacturing facility, at Maraimalai Nagar plant, near Chennai, a South Indian Metro
City.
Ford India did not register any significant growth in the passenger vehicle market in India (Refer
to Exhibit I for Ford Indias sales compared to the total passenger vehicle sales in India). In fact,
from 36,466 units in FY 2007-08 10 , its sales dropped to 28,741 units in FY 2008-09; the income
fell from Rs. 24.88 billion in FY 2007-08 to Rs. 21.20 billion in FY 2008-09, while the losses
increased from Rs. 510 million to Rs. 1.18 billion. The accumulated losses of Ford India from
inception to March 2009 were Rs. 9.38 billion. 1 1
As of 2009, Ford India sold around 2,000 cars a month while the market leader Maruti Suzuki
India Ltd. 12 ( Maruti Suzuki) sold over 71,000 cars. 1 3 The main reason for Ford Indias low sales
volume in the country was its lack of presence in the small car segment in a market which was
extremely price-conscious (Refer to Exhibit II for details on classification of passenger vehicles
according to SIAM, the Society of Indian Automobile Manufacturers 14 ).
According to SIAM, passenger cars were classified on the basis of length into mini (</=3,400mm),
compact (3,400-4,000mm), mid-size (4,001-4,500mm), executive (4,501-4,700mm), premium
(4,701-5,000mm), and luxury (>5,000mm). Earlier, cars had been classified on the basis of price
into segments A (< `3 lakh), B (`3-5 lakh), C (`5-10 lakh), and E (>`25 lakh). MUVs were
classified on the basis of seating capacity seven, nine, and 13-seaters. 1 5

THE SMALL CARS SEGMENT OF THE PASSENGER VEHICLE MARKET IN

INDIA

www.ford.com.

8 It

is the automotive division of one of the leading business conglomerates in India, the Mahindra Group. It
manufactures multipurpose vehicles, light commercial vehicles, tractors for agriculture, and three wheelers.

9 www.india.ford.com.
10

Financial year from April 2007 to March 2008

11

N. Ramakrishnan, Ford India Slips Deeper into Red; Hyundais Profits Dented, www.blonnet.co m,
October 11, 2009

12

Based in Gurgaon, it is one of the leading automo bile companies in India and manufactures passenger
cars, minivans, and sports utility vehicles. It earned annual revenues o f US$ 3.5 b illion for the financial
year April 2008- March 2009. Source: www.marutisuzuki.com.
13
www.marutisuzuki.com.
14
SIAM, New Delhi, is a representative body of the automotive industry in India.
15
http://www.dhanbank.com/pd f/reports/Auto%20 -%20Nov%201.pdf

As of 2010, passenger vehicle sales contributed to 16% of the total automobile sales in India 1 6
Passenger vehicle sales had shown an increasing trend in the 2000s. India was the seventh largest
producer of passenger cars in the world as of December 2010 with sales of 1.95 million units. 1 7
Maruti Suzuki, Hyundai Motor India Ltd. (HMIL) 1 8 , and Tata Motors Ltd. (Tata Motors) 1 9 were
the dominant players with a combined share of more than two-thirds of the total sales of passenger
cars 20 (Refer to Exhibit III for details on various manufacturers of passenger vehicles in India).
In India, small cars accounted for 78% of the total cars sold and the country was the largest
manufacturer of small cars in the world. 21 Small cars with an engine capacity of 0.8 liters to 1.6
liters accounted for the sales of around 900,000 cars in India (?) in 2009. With annual sales
forecast to grow to 3.0 million units by 2016, global automakers started moving to introduce small
cars in the country. 22 (Refer to Exhibit IV for market shares of various segments in annual sales of
passenger cars in India; Refer to Exhibit V for details on features of small cars from leading
producers).
Being the largest segment, the small-car segment witnessed the highest number of new car
launches i.e. 11 new launches between the three years 2007 and 2010 (of which five were launched
in 2010) with the major ones being the Ritz, the A-Star, and the Zen Estilo (from Maruti Suzuki),
the i10 and the i20 (from Hyundai), the Indica Vista (from Tata Motors), the Polo (from VW), the
Etios (from Toyota), the Ford Figo, and the Chevrolet Beat.
As of 2010, Maruti Suzuki was the market leader in the small cars segment, followed by HMIL
and Tata Motors .2 3 Maruti Suzuki had been selling small cars since the 1980s; HMIL started
selling them in the mid-1990s and Tata Motors in the early 2000s.
Understanding the potential of small cars in India, GM India entered this segment in 2007. As of
2009, it sold two models of small cars the Spark and the Aveo U-VA . Other players in the small
car segment at that time included Fiat India Pvt. Ltd 2 4 , Skoda Auto India Private Ltd 2 5 , and Honda

http://www.automobileindustryindia.com/resources/overview-of-indian-automobile-industry.html
Indian Passenger Vehicle Industry: Growth Momentum to Continue, www.icra.in, March, 2011.
18
It is the Indian subsidiary of Hyundai Motor Company, Seoul, South Korea. It manufact ures passenger
cars for the domestic market in India and also exports cars to other countries from India. Source:
www.hyundai.co.in.
19 Headquartered at Mumbai, Tata Motors is one of the leading auto makers of India. It man ufactures
passenger cars, multipurpose vehicles, utility vehicles, and trucks. It also provides financial services toward
purchase of its vehicles. For the financial year ending March 2009, it had Rs 741 billion in revenues. Source:
www.tatamotors.co m.
20 www.team-bhp.com.
16
17

21

India is the Seco nd Largest Small Car Maker, www.siliconindia.com, September 25, 2009.

Nik h il Gul ati and San ta nu Ch o ud h ury, Ford Targets India Market with First Small Car,
http://online.wsj.com/article/SB125369081200333397.html, September 23, 2009
23 September 2009 Indian Car Sales Figures & Analysis, www.team -bhp.com. October 7 , 2009.
22

24

It is an auto mobile company formed by a 50:50 joint venture between Italy -based Fiat Group Auto mobiles
S. p. A., (Fiat) and India-based Tata Motors. Its manufacturing plant at Ranjan gaon has the capacity to
produce 100,000 cars annually. Source: www.fiat-india.com (Accessed on October 26, 2009).
Based at Aurangabad, it is a wholly-owned subsidiary of Skoda Auto of the Czech Republic, which
manufactures passenger cars fo r the Indian market. Source: www.skoda-auto.co.in.

25

Siel Cars India Pvt. Ltd. 26 Toyota Motor Corp., Volkswagen AG, and Nissan Motor Co. planned to
step into the arena in the near future. 2 7
Figo (New Product) Development Process @ Ford
It was against such a competitive and complex backdrop that Ford decided to prepare Ford India
for the challenges ahead to put the company ahead of the competition.
As part of a strategic plan for the future called Ford 200028 , Ford India started implementing a
customer orientation into every aspect of Fords business operations so that every product and
service delivered by the company would be designed around the specific needs and wants of its
customers.
As customers tastes and needs were continuously changing, automobile companies including Ford
were forced to invest huge sums of money to ensure their products remained relevant and
attractive to their target market while updating their products and developing new ones to satisfy
their customers needs.
According to experts, product innovation would give companies an edge over their competitors
and help them gain market share. Car manufacturers spent billions of dollars every year
researching and developing new products and making improvements to existing ones. In this
29
industry, experts considered innovation a minimum requirement for survival.
Understanding Customers
As consumers wants and needs were constantly evolving, Ford wanted to keep track of them to
remain competitive. It monitored market trends, shifting consumer interests, and social and
political developments to identify issues that would affect consumers, the industry, and the
company. Ford had a network of internal and external experts from around the world to get a
diverse, comprehensive perspective on consumer trends and how they would affect consumers'
future choices on vehicles and mobility. Ford used these data and analysis throughout its
marketing, product development, and research and design organizations to guide future product
and technology developments. 3 0
Ford ensured its marketing experts used an intensive research and analysis process to understand
its potential customers and their needs. It had a =brand DNA and hypothetical target customer for
each of its new brands. Each individual product was also assigned its own specific DNA and target
Headquartered at Mumbai, it is a joint venture between Japan-based Honda Motor Company, and Siel
Limited, a group company of the Siddarth Shriram Group, Gurgaon. This joint venture was formed to
manufacture and market Honda passenger cars in India. Source: www.hondacarindia.com.

26

27

Nik h il Gul ati and San ta nu Ch o ud h ury, Ford Targets India Market with First Small Car,
http://online.wsj.com/article/SB125369081200333397.html, September 23, 2009
28
Previously, in 1995, Ford had embarked on an ambitious restructuring plan called Ford 2000, which
included merging its North American, European, and intern atio nal automotive operations into a single global
organization. Ford 2000 called for dramatic cost reductions to be obtained by reengineering and globalizing
corporate o rganizations and processes. Product development activities were consolidated into five Vehicle
Centers (VCs), each responsible for the development of vehicles in a particular consumer market segment
(one VC was in Euro pe). By making the processes and products globally common, Ford intended to
eliminate organizational and process redundancies and realize huge economies of scale in manufacturing and
purchasing.
29
The Ford Focus a Car for the Millennium, www.business2000.ie/pdf/pdf_3/ford_3rd_ed.pdf
30 Understanding Changing Customer Needs, http://corporate.ford.com/microsites/sustainability -report2009-10/economy-recovery-p roducts-needs

customer. Apart from containing simple demographic information such as age, gender, and
income, Fords target customer profiles had other details such as what they liked to do, what music
they listened to, and where they shopped. This complete approach helped the product development
31
team focus on designing a vehicle that would meet customers' needs and desires.
In addition to product- and brand-specific market research, Ford had a team specifically dedicated
to tracking shifts in the social, technological, economic, environmental, and political arenas. This
Global Consumer Trends and Futuring team identified trends that would impact the future of
consumers' values, attitudes, and beliefs. 32
The team found that the trends of consumers needs included

33

Increasing demand for more fuel-efficient vehicles

An increasing focus on "careful consumption," in which consumers had to balance their
values, passions, and preferences with practical purchases as the global economic
recession continued
Expanding interest in vehicles that helped consumers meet their increasing desire for
information and connectivity and make the most of their time
Ford conducted market research online and in person, refining and creating new data-gathering
processes that influenced product development and marketing campaigns. Christine Stasiw Lazarchuk, Ford director of Global Market Research, said Ford executives were truly interested in
customer feedback that would help in New Product Development decisions. Gordon Platto
(Platto), Ford chief designer,said, Were heavily influenced by market research. We go to
customer immersion events and spend time with customers in their homes to understand how they
use their vehicles. It enables us to better meet the customer needs. You can see the influence in our
new vehicles. 34
Platto added, As vehicle segments get smaller and more diverse, Ford uses market research to
understand how far to push design concepts and unique features. This is done by extracting
information from consumer questionnaires and by inviting customers to have open discussions
with researchers in focus groups. You go to market research with an open mind to understand what
the customers are looking for. 35
In order to refine a future niche vehicle, Market Research took a few exterior and interior designs
to a customer focus group to ask specific questions about participants' likes and dislikes. In the
next stage of the products development, the design team analyzed and interpreted the consumer
feedback. 36 By taking a disciplined approach to gathering consumer feedback, Ford gained a
better understanding of consumer expectations. 3 7
31 Understanding

Changing Customer Needs, http://corporate.ford.co m/microsites/sustainability-report2009-10/economy-recovery-p roducts-needs

32 Understanding Changing Custo mer Needs, http://corporate.ford.com/microsites/sustainability -report2009-10/economy-recovery-p roducts-needs
33 Understanding Changing Custo mer Needs, http://corporate.ford .com/microsites/sustainability -report2009-10/economy-recovery-p roducts-needs
34 Market Research Drives Product Development at Ford,
http://www.reliableplant.com/Read/3802/market-research-d rives-product-development-at-ford
35 Market Research Drives Product Development at Ford,
http://www.reliableplant.com/Read/3802/market-research-d rives-product-development-at-ford
36 Market Research Drives Product Development at Ford,
http://www.reliableplant.com/Read/3802/market-research-d rives-product-development-at-ford
37 Market Research Drives Product Development at Ford,
http://www.reliableplant.com/Read/3802/market-research-d rives-product-development-at-ford

Generally, the process of new product development involved a series of stages: the generation of
new ideas, screening of ideas to identify the one with the most potential success, development of
the idea into a concept that could be tested on a small group of potential customers in order to
design a marketing strategy around it, development of the product, test marketing, and finally
launching it into the market. 3 8 Ford India followed a unique product development process while
developing Ford Figo (Refer to Exhibit VI and Exhibit VII for Road Map and Market Plan for
Ford Figo)
The Idea behind Ford Figo
The idea for the Ford Figo came about from Ford Indias strategic plan for the future and the
market research which was carried out as part of that plan.
This research highlighted a number of changes occurring in the marketplace.
that:

For example, it found

Globally in the next five years, small cars would make up about 60% of all cars sold. To
be successful in its business, Ford wanted to become one of the major players in that
segment
The potential customer would be a young individual, just married probably within the
last 12 months and more ambitious. He lived at home with his parents, culturally
considered quite acceptable in India. He had an income of 300,000 to 400,000 rupees
($6,750 to $9,000) a year.
The car buyer had started becoming increasingly upwardly mobile, aspirational, probably
reasonably well educated at university level, with an MBA or beyond and he was
looking to move from a motorbike to a four-wheeler. 3 9 He took quality and value for
money for granted, and expected more security, less stress, and more personality in his car.
The Ford brand appealed more to the older age group and the company was in danger of
losing younger customers.
Ford used these changes in the marketplace to its advantage. It set about researching and
developing a car that would harness the true potential of the changing market. It wished to
change the attitude of consumers toward the Ford brand and also to capture a younger
generation of customers. It was against this background that the idea for the Ford Figo was
born.
The research had shown that there was a growing market of young buyers, particularly among
women. After listening to research, Ford decided to develop a small car specifically for India and
similar markets. The company believed that the small car segment was where all the action was
required and, hence, would account for the bulk of its new launches one every 12 to 18 months
over the next few years. 4 0 Ford decided to position the Figo in the high volume small-car segment.
Figo would meet the changing customer needs with its attributes pricing, fun to drive, cost of
ownership, interior space, technology, and safety.
The Figo offered a fantastic platform for Ford to enter the vehicle market affordably without
sacrificing style and comfort. According to Ford, while affordability and practicality were of great

38

The Ford Focus a Car for the Millennium, www.business2000.ie/pdf/pdf_3/ford_3rd_ed.pdf

Julian Lorkin, Marketing in India: How the Rubber Hit the Road for Ford's Figo,
http://knowledge.asb.unsw.edu.au/printer_friendly.cfm?articleid=1278, November 29, 2010
40 N. Ramakrishnan, Small Car Segment is Where All the Action is: Ford India Chief,
http://www.thehindubusinessline.in/bline/2010/02/03/stories/2010020352110200.htm, February 3, 2 010
39

importance in this segment, buyers were not willing to sacrifice style and performance. The Figo
was expected to be a perfect combination of style and affordability. 41
The design team focused on listening to customers prior to the initial design process, thus ensuring
that the final design of the Figo was representative of the desires of the market. Ford designers set
out to create an attractive exterior coupled with a stylized and exquisitely crafted interior that gave
generous proportions and exceptional value for money. Creating appeal and communicating
value to the customer starts with good design, said Emily Lai, color and materials Design
42
Manager for Figo. You want a car that reflects and makes a statement about you.
Michael Boneham, President and Managing Director, Ford India Pvt Ltd, said, It is a clear shift in
strategy and thinking. =Finally we listened to the customer. The company had maintained that the
mid-size and entry-level sedans, represented by its first launch, the Ikon, and the subsequent
Fiesta, were the segments to be present in the country, what with a growing affluent middle class.
43
Ford argued that the size of the vehicle did not matter as long as the price was right.
Turning the Idea into Reality
The Ford Figo was designed to capture the younger generation of customers and to cater to the
needs of a wider range of buyers. As such. it was specifically targeted at the mid-20s age group
and the emerging needs of this group. Extensive Indian market research was undertaken to identify
the core needs of this target market.
Ford Indias marketing team gathered 15 young men from the capital city, New Delhi, and from
Lucknow, a smaller, second-tier city. Each of the men represented the very core of the customer
target of the new car, based on Fords extensive research into the Indian small-car market. Ford
believed that newly married young men, in their mid-20s, represented the prime target for Figo
(Refer to Box I for details about Target Customer for Figo).
Box I
Target Customer
Sandeep
Young, 26-27 years old, Ambitious, with aspirations of moving up both socially and
professionally; Newly married with no children, living with parents
Likes international, established, trusted brands; Stylish and cool in his circle
Technologically savvy part of online social networks / blogs
First time value seeking and status driven buyer looking for
o Attractive Design
o Interior Spaciousness
o Substantial Package
o Cost of Ownership
Adapted from Ford India Internal Documents
To help designers, engineers, and marketers understand this target, the potential customer was
given a typical name. For the new Ford Figo, that target customer was named Sandeep . Ford
wanted to understand what made them tick, what their lives were about, and what they wanted in a
http://www.yworld.co.za/social/ford-figo-goes-entry-level/
http://www.yworld.co.za/social/ford-figo-goes-entry-level/
43 N. Ramakrishnan, Small Car Segment is Where All the Action is: Ford Ind ia Chief,
http://www.thehindubusinessline.in/bline/2010/02/03/stories/2010020352110200.htm, February 3, 2 010
41
42

car. Rahul Gautam, Ford India brand manager, described the potential target customer, Sandeep is
the quintessential middle class youth. He is coming up in life and he is ambitious. He has just
gotten married and he is starting to earn more, getting recognition in his job, and being promoted.
He wants to give attention to his family, he respects his parents, and he wants to spend time with
his wife, plus he aspires to do well in his job. Interestingly, he has kept his bachelor mindset. So all
this leads to some stress and tension because he feels pulled in different directions and short of
time.
He added, Hes looking for a product that offers his own, exclusive space. A place he can use to
groove to his music while going to and from work, a place he can use to take his wife out safely at
night, pick up relatives or friends or take the family on a weekend trip. He worries about two
wheelers and accidents so the right car relieves tension for him.
Fords learning from the research was rich in detail, and it drove the product, marketing, and
communication decisions. This research found that the target customers:
were looking for =a break from the routine
liked to buy the latest vehicle but were cautious and tended not to spend beyond their
means
were looking for a distinctive design in a car and new styles which would help them,
express their individuality.
Designing a Car Matching the Needs of Customers
Mulally stated the new Ford Figo had been designed and engineered to compete in the heart of the
domestic India car market. 4 4
The new Ford Figo was designed to appeal to those who were more open to change, more
independent minded, and more willing to embrace new things. It was designed to change
customers expectations of what a car in this segment should offer in terms of design, package, and
driving dynamics. 4 5
Sharing key elements of Ford's kinetic design language with vehicles like the globally renowned
Ford Focus, Ford Mondeo, and the Ford Fiesta, Ford Figo featured a fresh, contemporary shape
that offered a distinctive alternative to traditional brands in this segment. The design language
conveyed a dynamic spirit of energy in motion.
The Figo was actually designed in Australia. 4 6 Development work was done by Fords Asia Pacific
& Africa product development team in Broadmeadows, Australia, near the northern outskirts of
Melbourne. The team was led by Scott Strong. Broadmeadows was the headquarters of Ford
Australia while Ford's Asia Pacific & Africa product development's head office was located in
Bangkok, Thailand. 4 7 The Figo was based on the Mk5 Europe's Ford Fiesta 4 8 .4 9

44

Nik h il Gul ati and San ta nu Ch o ud h ury, Ford Targets India Market with First Small Car,
http://online.wsj.com/article/SB125369081200333397.html, September 23, 2009
45
The Ford Focus a Car for the Millennium, www.business2000.ie/pdf/pd f_3/ford_3rd_ed.pdf
46 Ford Figo - Built in India, Developed in Australia. And 2012 Ford Ranger,
http://www.theautoindustrieblog.com/2009/09/ford-figo -built-in-india-developed-in.html, September 30,
2009
47
Ford Figo - Built in India, Developed in Australia. And 2012 Ford Ranger,
http://www.theautoindustrieblog.com/2009/09/ford-figo -built-in-india-developed-in.html, September 30,
2009

When the design team for the new Figo met with the marketing team from India, the direction
given to them was: ''We Want More''. After deciding on packaging objectives that needed to be
met, such as reducing the overall length of the car to suit the Indian market, the designers were
50
given the go-ahead to apply a near-clean sheet approach to both the interior and exterior.
The Figo was tiny: 3.8 meters by 1.7 meters. According to experts, this size was just right to ease
its passage through the tide of bullock carts, angry taxis, handcarts, motorbikes, and cows that clog
(India's) city roads. Moreover, Ford used easy-to-replace components, like bumpers, to handle the
unavoidable dents and dings. 51
Designers ensured that despite its youthful spirit, Figo was mature and smart. Although it was
small in size, it was designed to have solidness and safety. 52 With the backing of the Ford
management and the Indian marketing team, the design team went to work adding more
personality to the Figo and strategically taking elements of the global Ford kinetic design
philosophy and adding them to the new interior and exterior designs.
Quality, substance, and generous proportions were given importance in the design of the new Ford
Figo, which featured a solid stance, an invitingly large interior, and a vibrant, youthful character.
Its package was right-sized for the market, which was predominated by congested urban driving
conditions.
From its modern headlamps, grille shapes, and the sculpted bonnet of its distinctive face to the
subtle integrated spoiler and chamfered window shape at the rear, the Ford Figo was filled with
kinetic design touches. These also included sculpted shapes to the body side chiseled front
fenders, a "comet tail" undercut in the doors, and additional light-catching sculpting in the lower
bodyside which combined to communicate the solidity, substance, and protective safety of its
design. 53
The bold graphic of Ford Figo's large side window shape was another key kinetic design feature
hinting at the comfort and spaciousness. The side window graphic was executed with a blackedout B-pillar, an elegant design touch that unified the side windows into one shape visually. With its
wheels positioned at the four corners of the vehicle with minimal overhang, Ford Figo's bold wheel
arches self-assuredly signaled its agility and solidity.
Beyond design, Figo had lifestyle features like CD with MP3 compatibility and =Aux-in port for
iPod connectivity. The new Ford thus instantly connected with the energy and vitality of the buyer.
Developing the Prototype

48

Ford Figo - Built in India, Developed in Australia. And 2012 Ford Ranger,
http://www.theautoindustrieblog.com/2009/09/ford-figo -built-in-india-developed-in.html, September 30,
2009
49 This should not be confused with another Ford model sold in India, also under the name Fiesta. The Indian
Fiesta was also rumored to have received significant engineering inp ut fro m Ford Australia.
50
New Ford Figo Brings Kinetic Design for Economy & Small Cars in India,
http://www.zimbio.com/Luis+Figo/articles/T1SgcCPDEra/New+Ford+Figo+Brings+Kinetic+Design+Econo
m, March 11 , 2010
51

http://www.theglobeandmail.com/globe-drive/driving-it-home/ford-figo -takes-onindia/article1494927/print/
52
http://www.yworld.co.za/social/ford-figo-goes-entry-level/
53 Ford's Global CEO Reveals New Ford Figo Targeting India Market and Export Sales,
www.india.ford .co m, September 23, 2009

The prototype development process started with a thorough understanding of the needs and
requirements of the target market. Ford used advanced technology and paid attention to the most
minute detail to ensure the car reflected the needs of its target market. A highly advanced threedimensional imaging computer system was used to ensure that everything in the car was within
reach.
Variations in torso, limb size, and comfort values were calculated for all human joints. As a result
of this, items like seats, seat belts, mirrors and so on, were made adjustable to suit different car
drivers. In addition, Ford researched every other aspect of the car from its physical shape, color,
the texture of the interior surfaces, the sound of the car, and even the interior smells.
The car was made with a 1.19-litre 70 bhp petrol engine and a 1.4-litre 68 bhp diesel engine, with
four variants LXI, EXI, ZXI, and Titanium (Refer to Exhibit VIII for Specifications of Ford
Figo). Both these engines were manufactured at the company's new 2.5-lakh capacity engine plant
near Chennai. 5 4
Ford used the Three-Wet High-Solids paint technology, which gave an exceptional high-gloss
finish with excellent depth of color, while providing durability and increased resistance to
scratches and stone chips.
Throughout the assembly process, error-proofing technology helped measure precision. The plant
was equipped with precise part checking fixtures that allowed engineers and manufacturing
technicians to verify build precision very accurately.
Created with a best of the best approach, it had been benchmarked against other competitive
facilities globally, as well as the existing manufacturers in the Indian market, for quality and
production efficiency. 55 We're confident that the new Ford Figo will be extremely attractive to
Indian car buyers, said Boneham. 5 6
Product Development
The Figo was developed by engineers of the Asia-Pacific in consultation with Indian Engineers.

57

The Ford Figo was designed with a unique personality to appeal to target buyer groups.

As India was a price sensitive market, to keep the cost price under control, Ford decided to source
up to 80-85% of the parts for Figo from suppliers in India. 58 Boneham said, This is about where
you need to be in this segment to be really competitive from the material cost point of view which
then gives you the opportunity to price aggressively. One of the other things that we are going to
focus and which is very critical in this segment is cost of ownership. Total lifecycle cost the
purchase price, which obviously people are very sensitive about, fuel economy, scheduled
maintenance, parts pricing, overall competitiveness. We are going to be really aggressive in this.
We have done a lot of work benchmarking against the key competitors on component pricing, on
http://www.thehindubusinessline.com/todays-paper/tp-corporate/article987911.ece?ref=archive
Ford Introduces New Figo Hatchback for Indias Burgeoning B-segment,
http://www.mazdas247.com/forum/showthread.php?123755223
56
Ford -introduces-new-Figo-hatchback-for-India-s-burgeoning-B-segment,
http://www.mazdas247.com/forum/showthread.php?123755223
57
Murali Gopalan, Ford to Use Figo Inputs fo r Global Car Plans,
http://www.thehindubusinessline.com/todays-paper/tp-corporate/article988070.ece?ref=archive, April 1,
2010
58 Nik h il Gul ati and San ta nu Ch o ud h ury, Ford Targets India Market with First Small Car,
http://online.wsj.com/article/SB125369081200333397.html, September 23, 2009
54
55

scheduled maintenance, fuel economy, and people are going to be pleased with what they see from
59
that perspective. That is going to be a key part of the story as we move forward.
According to the company, Figo was designed to give a fuel economy of around 15.6 km a liter
and 20 km a liter for the petrol and diesel versions, respectively. 60
At Ford, purchasing was organizationally independent of product development and had always
been a powerful force within the company. Because of the sheer volume of materials and services
Ford purchased, a very slim reduction in purchasing cost could result in very significant savings.
Consequently, purchasing was involved closely in nearly every product decision.
Test Marketing
Before the car was launched, it was necessary to put it through a thorough test market program.
Boneham said, We are running at about 160 vehicles off the line for various trials. We are doing a
lot of kilometers all over India at the moment. We have gone through huge testing regimes all over
the world. 6 1 The objective of this was to test the car rigorously prior to launch and provide
feedback to the company. A 3.2 kilometer testing facility was designed to provide engineers with
vehicle feedback under real world conditions to evaluate vehicles for squeaks and rattles, braking
performance, steering maneuvers, and wheel alignment. Straight roads, twisty roads, pavement
with a variety of smooth and rough surfaces and even simulated village streets were built into the
course.
Once the vehicles were in regular production, they were randomly pulled from the assembly line
and tested to determine if all functions were operating correctly. Designed with safety in mind, the
new test facility allowed engineers to test multiple vehicles at one time and helped reduce the
number of tests on public highways.
The company engaged consumers through moderated clinics and through one-on-one interviews
before the vehicles reached market. It also used the Internet for consumer comments on auto sites,
chat rooms, and blogs. 6 2
Launching of Figo
On September 23, 2009 Alan Mulally, Fords president and CEO, revealed two Figo models, one
in bright Squeeze green and the other silver, in Delhi. In the reveal sequence, the Ford Figo
emerged in a lightning surround of colors, lights, Bollywood-inspired music, smoke, and camera
flashes.
The launch of the Ford Figo was the biggest and most important ever for the Ford Company. Not
surprising then that industry experts, dealers, employees, customers, and the competition were
eagerly awaiting its launch. The car was launched in February/March 2010. Ford executives Joe

N. Ramakrishnan, Small Car Segment is Where All the Action is: Ford India Chief,
http://www.thehindubusinessline.in/bline/2010/02/03/stories/2010020352110200.htm, February 3, 2 010
60 Ford Gets Aggressively with Figo Pricing, http://www.thehindubusinessline.com/todays -paper/tpcorporate/article987911.ece?ref=archive, March 9 , 2010
61 N. Ramakrishnan, Small Car Segment is Where All the Action is: Ford India Chief,
http://www.thehindubusinessline.in/bline/2010/02/03/stories/2010020352110200.htm, February 3, 2010
62 Market research drives product development at Ford,
http://www.reliableplant.com/Read/3802/marketresearch-drives-product-development-at-ford
59

Hinrichs, president of Ford Asia Pacific and Africa (APA)

of the newly launched Figo car in New Delhi.

63

, and Boneham explained the features

Ford launched the Figo in the price range of Rs6 4 3,49,000 to Rs 4, 42,000 for the petrol version
and Rs 4, 47,000 to Rs 5, 29, 000 for the diesel version. 65 (Refer to Box III for the price details of
competitors of Ford)
Box III
Figos Competition in Terms of Price
Chevrolet Beat
Rs.3,41,000 for PS variant and Rs.3,62,000 for LS variant, 1.2-litre petrol engine.
Chevrolet Spark Rs.3,46,000 for 1-litre petrol engine.
Hyundai Xantro Xing
Rs.3,38,000 to Rs.3 ,58,000 for 1.1-litre petrol engine variants.
Hyundai I10 Rs.3,41,000 and Rs.3,44,000 for IRDE variant.
Maruti Suzuki A Star
Rs.3,51,000 for LXI variant, 1-litre petrol engine.
Maruti Suzuki Estilo
Rs.3,48,000 fo r LXI variant, 1-litre petrol engine.
Tata Indica Vista (Quadrajet)
Rs.4,35,000 (Aqua) and Rs.4,58,000 (Terra), 1.2-litre diesel.
Tata Indica Vista (Safire)
Rs.3,52,0 00 (Terra), 1.2-litre petrol.
Source: Ford Gets Ag gressively with Figo Pricing, http://www.thehindubusinessline.com/todays-paper/tpcorporate/article987911.ece?ref=archive, March 9 , 2010

Boneham admitted that the Figo was targeted at the upwardly mobile mature youth market. Our
market research indicated and largely confirmed to us the complexity of the Indian market. In
other parts of the world people look at the features of the cars first and then the price, it is the other
way around in India. Aspirational youth still live in a joint family system and seek advice from
their elders on major decisions, he said. 66
Boneham explained how the change in Fords approach would be attractive to a first time car
buyer, We focused on parts and keeping their cost down. The way we did that was with huge
localization 85% of the Figo is localized. The components are built in India. This was a
67
significant strategy to get the cost down first, so we could price-position the car right.
Experts said that Figo featured a premium experience at a budget price. However, they questioned
whether Ford India would be able to find a gap in the small car segment to position and price the
Figo effectively. Boneham said, We have kept our promise and priced all four Ford Figo models
very competitively to emphasize Fords commitment to this huge segment of the growing Indian
automobile market. We are committed to setting new benchmarks with Figo in this segment. Figo
offers more features, interior space, technology, and durability than other vehicles at this price in
the segment. 68
Mulally claimed Figo would be a game-changer for Ford India. He said, We hope to make
reasonable returns on investment in the new car project. The Figo should help us make

Fords APA region enco mpasses markets in three continents, including Australia, China, India, Thailand
and South Africa. Industry sales in the region will increase from 16 million units in 2009, to an estimated 35
millio n units by 2018. The region is expected to account for nearly 70 percent of Fords world wide g ro wth
in the next decade.
64 Rs.= Indian rupees. US$1= Rs. 44.89 as on June 8, 2011
65
Ford Gets Aggressively with Figo Pricing, http://www.thehindubusinessline.com/todays -paper/tpcorporate/article987911.ece?ref=archive, March 9 , 2010
66
Pawan Luthra, How to Market in India: Ford India MD, http://www.indianlink.com.au/
67 Julian Lorkin, Marketing in India: How the Rubber Hit the Road for Ford's Figo,
http://knowledge.asb.unsw.edu.au/printer_friendly.cfm?articleid=1278, November 29, 2010
68 Ford Rolls Out Figo at Rs 3.49 lakh, http://www.newsgaze.com/auto/ford -rolls-figo-rs-349-lakh/, March
13, 2010
63

considerable gains in India, where we have had not much presence in the market till now. We do
69
not operate on the basis of market share but on customer demand and products.
In the highly price-conscious and competitive Indian small car market faced with the impending
launch of new models of small cars from various global automakers, what should Ford India do to
market its Figo?

69

Bhattacharya Sindhu, Figo will b e a game changer for Ford in India, http://findarticles.com/p/newsarticles/dna-daily-news-analysis-mumbai/mi_811 1/is_20090924/figo-game-changer-fordindia/ai_n50946827/, September 24, 2009

Exhibit I
Comparison of Ford Indias Sales to Total Passenger Vehicle Sales in India

Adapted from www.automonitor.co.in

Exhibit II
Classification of Passenger Vehicles as per SIAM
Segment Length Example
A1 - Mini Up to 3400 mm M800, Nano
A2 - Compact 3401 to 4000 mm Alto, Wagon R, Zen, i10, A-Star, Swift, i20, Palio, Indica
A3 - Midsize 4001 to 4500 mm City, Sx4, Dzire, Logan, Accent, Fiesta, Verna
A4 - Executive 4501 to 4700 mm Corolla, Civic, Optra, Octavia
A5 Premium 4701 to 5000 mm Camry, E class, Accord, Sonata, Laura, Superb
A6 - Luxury Above 5000 mm S class, 5 series
B1 - Van Omni, Versa, Magic
B2 MUV - Multi Utility Vehicle /
MPV - Multi Purpose Vehicle
SUV Sport Utility Vehicle CRV, Vitara
Adapted from www.siamindia.com

Innova, Tavera, Sumo

14

Company
Name
Hindustan
Motors Ltd,
New Delhi.
(Collaboration
with Mitsubishi
Motors, Japan)
Maruti Suzuki
India Ltd, New
Delhi.

DaimlerChrysler
India Private
Ltd, Pune
Fiat India
Private Ltd,
Pune.

Exhibit III
An Overview of Manufacturers of Passenger Vehicles in India - As of September 2009
Year of Vehicles
Models Small Car Models and their Prices (in Rs.)
Establishment Manufactured
1942 Passenger cars,
Sports Utility
Vehicles
(SUVs)

Ambassador, Pajero, Lancer,

Lancer Cedia, Outlander, Montero.

1981 Passenger cars,

SUVs.

Maruti 800, Maruti Omni, Alto,

Gypsy, Versa, Wagon-R, Esteem,
Zen Estilo, Baleno, Vitara, Swift,
A-Star, SX4, Ritz.

1994 Passenger cars Benz C-Class, Benz E-Class, Benz

S-Class, Benz SL-Class
1997 Passenger cars Sienna, Palio Stile, Palio Stile
Multijet. Petra, Uno, Linea,
Grande Punto, Fiat 500

None

Maruti 800 Rs 185,000 - Rs 222,000

Alto Rs 225,000 - Rs 290,000
Wagon-R Rs 330,000 - Rs 426,000
Zen Estilo Rs 312,000 - Rs 398,000
A-Star Rs 345,000 - Rs 410,000
Swift Rs 400,000 - Rs 520,000
Ritz Rs 390,000 - Rs 517,000
None
Palio Stile Rs 336,000 - Rs 444,000
Fiat 500 Rs 1,482,500
Palio Stile Multijet Rs 431,000 - Rs 470,000
Grande Punto Rs 400,000 - Rs 612,000

General Motors
India Private
Ltd, Vadodara.

1994 Passenger cars

and Multi
Purpose
Vehicles
(MPVs)

Optra Magnum, Tavera, Vectra,

Spark, Aveo, Aveo U-VA,
Captiva.

Spark Rs 320,000 - Rs 423,000

Aveo U-V A Rs 400,000 - Rs 497,000

Company
Name
Honda Siel Cars
India Pvt. Ltd,
Greater Noida.
Hyundai Motors
India Ltd,
Chennai.

Year of
Establishment

Vehicles
Manufactured

Models Small Car Models and their Prices (in Rs.)

1995 Passenger cars

and MPVs

Honda Accord, Honda CR-V,

Honda City, Civic, Honda Jazz.

1996 Passenger cars

and SUVs

Santro Xing, Getz, Accent, Verna,

Sonata, Terracan, Tucson, i10, i20.

Toyota
1997 Passenger cars,
Innova, Corolla, Camry, Prado,
Kirloskar
SUVs, and
Land Cruiser, Fortuner
Motors Private
MPVs
Ltd, Bangalore.
Skoda Auto
2001 Passenger cars Superb, Laura , Octavia, Fabia
India Private
Ltd,
Aurangabad.
Audi AG, 2004 Passenger cars
Audi A4, Audi A6, Audi A8, Audi
and SUVs
TT, Audi Q5 and Audi Q7, Audi
R8.
BMW India
2007 Passenger cars
Private Ltd,
and MPVs
Gurgaon.
Nissan Motor
2008 Passenger cars
Company Ltd.
and MPVs
Porsche AG 2003 Passenger cars
and MPVs
Tata Motors
1945 Passenger cars,
Limited,
MPVs, Trucks.

BMW 3 Series, BMW 5 Series,

BMW 6 Series, BMW 7 Series

Honda Jazz

Rs 698,000

Santro Xing Rs 264,000 - Rs 373,000

Getz Rs 360,000 - Rs 500,000
i10 Rs 332,000 - Rs 540,000
i20 Rs 480,500 - Rs 773,000
None

Fabia

Rs 490,093

None

None

X-Trail, Maxima.
Boxster, Cayman, 911, Panamera,
Cayenne.
Nano, Indica, Indica Vista, Indica
Xeta, Indigo, Sumo Grande, Safari

None
None
Nano Rs 115,000 - Rs 172,000

Company
Name
Mumbai.

Year of
Establishment

Vehicles
Manufactured

Models Small Car Models and their Prices (in Rs.)

Indica V2 Rs 338,500
Indica Xeta (petrol) Rs 314,250
Indica Vista Rs 447,400

Compiled from various sources

Ford India in 2009 (A): Need for a Strategy Change?

Exhibit IV
Market Share of Various Segments in the Annual Sales of Passenger Cars in India

Adapted from Indian Passenger Vehicle Industry: Long Term Demand Outlook Remains
Robust, www.icra.in, January 2010.

18

Ford India in 2009 (A): Need for a Strategy Change?

Exhibit V
Features of Various Small Cars in India
Maruti Alto Hyundai i10 Maruti Swift Tata Indica V2 Hyundai i20 GM Spark
Model
Engine power
(in bhp 70 )
Seating
capacity
Variants
Length
Torque
(in Nm7 1 )
Fuel efficiency
(in kmpl)
Maximum
speed
Doors

Petrol Petrol Petrol/Diesel Petrol/Diesel Petrol/Diesel Petrol

46 bhp 66 bhp 87 bhp (petrol)
75 bhp (diesel)

71

79-100 bhp (petrol)

89 bhp (diesel)

63 bhp

5 5 5 5 5 5
3 4 5 5 8 6
3495 mm 3565 mm 3760 mm 3675 mm 3940 mm 3495 mm
62 Nm @ 3000
99 Nm @ 113 Nm @ 4500 rpm 140 Nm @
rpm
2800 rpm
3000 rpm
17.6 12-16.3 14-18 (diesel)
12.2-16.6 (diesel)
12-17 (petrol)
10.5-14.5 (petrol)
137 kmph 149 kmph 160 kmph 135 kmph 156 kmph
5 5 5 5 4 5

Compiled from various sources.

7 0 Brake

64-70 bhp (petrol)

53-69 bhp (diesel)

horse power

Newton meter
19

220 Nm @ 1750 rpm 90.3 Nm @

4200 rpm
19-22.6 (diesel)
12.3-16.9
11.3-16.1 (petrol)
164 kmph

Exhibit VI
Ford Figo Key Milestones to Success

September 2007 Target Customer Identification

October 2007 Identify the variants and features
Ma rch 20 09 Consumer Immersion an ethnographic wo rkshop with target customers for top management and marketing
September 2009 Global Reveal by Ford Mo tor Co. CEO Alan Mulally in Delhi
January 2010 Early Reveal to Media
February 2010 onward Pre launch and launch campaigns and high digital focus

Exhibit VII
Ford Figo: Take To Market Plan

Exhibit VIII
Specifications of Ford Figo
VEHICLE SUMMARY
Name: Figo Lxi
Car Body Type: Hatchback
Top Speed: 160
Fuel Consumption:
Highway 15.00 kmpl.
Fuel Consumption:
City 12.00 kmpl.
ENGINE SPECIFICATIONS
Engine Type: Petrol
Maximum Power: 70 Bhp @ 6250 rpm
Maximum Torque: 102 Nm @ 4000 rpm
DIMENSIONS
Length: 3795 mm
Width: 1680 mm
Height: 1427 mm
OTHER SPECIFICATIONS
Seating Capacity: 5
Steering: Power
Brakes: Front Disk, Rear Drum
Gears: 5 Manual
Fuel Tank: 45.00
Adopted from various sources