American car maker Ford recently partnered with Indian auto major M&M
to explore joint working in several areas like sourcing, product development and electric mobility. ANURAG MEHROTRA
, managing director at Ford India, tells Ajay Modi
will help Ford to have a successful and profitable growth in India. Excerpts:
Did you have a relook at any of the strategies in the company after taking charge as MD this year?
The strategy was well laid out and it is correct. I personally speak to customers, dealers and employees, and the intent is right. The key is how we go about executing it. We will continue to strengthen the brand, enhance affordability, improve localisation and scale to become the trusted automobile and mobility brand in India.
Ford, like several players in the Indian market, is yet to make profits. How far is profitability?
We don’t intend selling any product at a loss. That is very clear. When you run a business, you need to make sure it is sustainable and profitable. Everything that we are doing now is designed to be able to deliver that. Our top line is growing at 30 per cent, our Ebitda (earnings before interest, taxes, depreciation, and amortisation) is growing at 20 per cent. I think we are heading in the right direction.
In April-October, Ford’s domestic volume declined 8 per cent, while the industry grew at 8 per cent. What explains this?
If we go by the calendar year, we were growing at 22 per cent during the first half and the industry was at 9 per cent. In the second half of the year, one of our suppliers had serious challenges and we were short on parts. The ramp up of the new EcoSport was going on in the Chennai plant. Both these factors did impact us. But I would be surprised if, going forward, we would not be beating the industry growth rate.
Figo, your entry segment car, is doing lower volume than the Figo Aspire and your SUV EcoSport. Is there a challenge?
Can you chase more volumes? Yes, you can. But it is going to come at the cost of margins, and if you look at the past two years, it has been a relative negative pricing environment. In years of growth, players take 1-3 per cent pricing increase. But in past two-three years, while industry has not been making these increases, the level of discounts in the market has gone up. That puts pressure on margins.
What will give the company confidence to bring electric vehicles for the Indian market?
You need two things. The policy framework has to be set appropriately and then it needs to be stable and predictable. If you give these two elements to your policy framework, the business will take over and start talking about bringing in products. Today, I am developing products for 2022. I need policy and that product is going to last for another 10 years. So, I need a 15-year predictability on policy, so that we can make right level of investments for delivering on the government’s vision.
A non-binding deal has been signed between the two firms to explore areas such as sourcing, product development, electrification, mobility, etc. We will work together on all of these simultaneously. All the areas identified with Mahindra would essentially be supporting the four strategic pillars that are critical for our success in India.