Ford Figo

MKTG/299
IBS Center for Management Research

Ford Motor Company in India: Developing the Ford Figo
This case was written by R Muthukumar, under the direction of Debapratim Purkayastha, IBS Hyderabad. It was compiled from
field research, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective
handling of a management situation.

2012, IBS Center for Management Research. All rights reserved.
To order copies, call +91-08417-236667/68 or write to IBS Center for Management Research (ICMR), IFHE Campus,
Donthanapally, Sankarapally Road, Hyderabad 501 504, Andhra Pradesh, India or email: info@icmrindia.org
www.icmrindia.org

1

MKTG/299
Ford Motor Company (Ford), one of the global leaders in the automotive industry found itself
trailing in terms of sales volumes in the Asian region, especially India since its inception. Though
it had entered the Indian auto market in 1995 and introduced mid-sized car models that were doing
well in respective niche segments, 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
and Ford India was not present in that segment. 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 was required through
its wholly-owned subsidiary Ford India Pvt. Ltd (Ford India) for the Indian market. Ford India
undertook marketing and consumer 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 Ford Figo in partnership with global and regional Product Development teams..
By the end of 2009, the team at Ford had developed its first small car through which Ford sought
to gain a foothold in the emerging Asia Pacific and Africa markets.
i
The Figo was targeted at the
growing market of young buyers in India. The company felt that it had done a good job of
understanding the pulse of the market, the consumer mindset and was ready with a product that
would appeal to the target segment. According to the company, Figo offered more features,
interior space, technology and durability than other vehicles in the same price range.
ii
Ford Motor
Companys President and CEO Alan Mulally (Mulally) said, We are confident the Ford Figo will
be a product that Indian consumers really want and value.
iii
However, the challenge before the
team was how to launch this new car in the highly competitive Indian small car market and how to
market Figo in a way that it would appeal to the target segment.
THE SMALL CARS SEGMENT OF THE PASSENGER VEHICLE MARKET IN
INDIA
According to the Society of Indian Automobile Manufacturers
1
(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 were
classified on the basis of price into segments A (< Rs
2
.300,000), B (Rs. 300,000-500,000), C (Rs.
500,000- Rs. 1 million), D (Rs. 1 million - Rs. 2.5 million) and E (> Rs. 2.5 million). Multi Utility
Vehicles (MUVs) were classified on the basis of seating capacity seven, nine, and 13-seaters.
iv

(Refer to Exhibit I for details on classification of passenger vehicles as per SIAM)
As of 2010, passenger vehicle sales contributed to 16% of the total automobile sales in India.
v

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.
vi

Maruti Suzuki, Hyundai Motor India Ltd. (HMIL)
3
, and Tata Motors Ltd. (Tata Motors)
4
were the

1
SIAM, New Delhi, was a representative body of the automotive industry in India.
2
Rs.= Indian rupees. As of mid 2011, US$1 was approximately equal to Rs. 44.89.
3
It is the Indian subsidiary of Hyundai Motor Company, Seoul, South Korea. It manufactures passenger
cars for the domestic market in India and also exports cars to other countries from India.
4
Headquartered at Mumbai, Tata Motors is one of the leading automakers of India. It manufactured
passenger cars, multipurpose vehicles, utility vehicles, and trucks.

2
dominant players with a combined share of more than two-thirds of the total sales of passenger
cars
vii
(Refer to Exhibit II for details on various manufacturers of passenger vehicles in India).
In India small cars accounted for more than 70% of the total cars sold in the country and the
country was the largest manufacturer of small cars in the world.
viii
Small cars - mini and compact
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.
ix
(Refer to Exhibit III for market shares of various segments in annual sales of passenger
cars in India; Refer to Exhibit IV for details on features of small cars from leading producers).
Being the largest segment, the small-car segment witnessed the highest new car launches i.e. 11
new launches between the three years 2007 and 2010 (of which five were launched in 2010) with
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.
x
Maruti Suzuki had been selling small cars since the 1980s; HMIL and Tata
Motors started selling them in the late-1990s. 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. As of 2010, other players in the small car segment included Fiat India Pvt.
Ltd
5
, Skoda Auto India Private Ltd
6
, Honda Siel Cars India Pvt. Ltd.
7
, Volkswagen India Pvt. Ltd.
8

and Nissan India Motors Pvt. Ltd.
9
, Toyota Kirloskar Motor Pvt. Ltd.
10
, planned to step into the
arena in the near future.
xi

FORD IN INDIA
Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, USA,
manufactured or distributed automobiles across six continents. With about 201,000 employees and
about 90 plants worldwide, the companys automotive brands included Ford, Lincoln, Mercury
and Volvo. The company provided financial services through Ford Motor Credit Company.
Established in 1995, Ford India was a wholly owned subsidiary of Ford Motor Company with
more than 2,300 employees. Ford started its operations in India in 1995 as a 50/50 joint venture
with Mahindra & Mahindra
11
(M&M). The company launched its first product in India The
Escort (C segment sedan) in 1996 from M&Ms Nashik Plant. In 1999, the Escort platform was
ceased and Ford launched Ikon from its new facility in Chennai. This was followed by the launch
of Endeavour SUV in 2003, the Fusion in 2004 and the Fiesta in 2005. In March 2005, Ford
bought out M&Ms 15% stake in the company.

5
It is an automobile company formed by a 50:50 joint venture between Italy-based Fiat Group
Automobiles S. p. A., (Fiat) and India-based Tata Motors. Its manufacturing plant at Ranjangaon has the
capacity to produce 100,000 cars annually.
6
Based at Aurangabad, it is a wholly-owned subsidiary of Skoda Auto of the Czech Republic, which
manufactures passenger cars for the Indian market.
7
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.
8
It is the Indian subsidiary of Europe-based Volkswagen AG, a passenger cars manufacturer.
9
It is the Indian subsidiary of Japan-based Nissan Motors Company.
10
It was an automobile company formed as a joint venture between the Japan-based Toyota Motor
Corporation and Indian-based Kirloskar Group.
11
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.

3
For the period January to December 2006, Ford India posted an overall growth of 87%. In January
2008, Ford announced plans to invest US$ 500 million to double the capacity, set up an engine
plant and launch Figo. Ford India registered a 3% overall annual growth in 2009 on year-on- year
sales performance, selling a total of 29,488 units in this year compared to 28,563 units sold during
the previous year.
Ford India did not register any significant growth in the passenger vehicle market in India (Refer
to Exhibit V for Ford Indias sales compared to the total passenger vehicle sales in India). 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 a month.
xii
According to experts, 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.
NEW PRODUCT DEVELOPMENT PROCESS FOR FIGO
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
launch it into the market.
xiii
Ford India followed a unique product development process while
developing Ford Figo (Refer to Exhibit VI for Fords approach to new product development).
THE IDEA BEHIND THE 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.

For instance, it found that:

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 Target 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 Rs. 300,000 to 400,000 (US$6,750 to US$9,000) a
year.
The car buyer had started becoming increasingly upwardly mobile, aspirational, reasonably
well educated at university level, with an MBA/Post Graduation or beyond and he was
looking to move from a motorbike to a four-wheeler.
xiv
He viewed quality and value for money
as hygiene, 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
the 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.

In September 2007, Ford identified its target customer for Figo. 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 and, hence, would account for the

12
Based at Gurgaon, it is one of the leading automobile companies in India that manufactures passenger
cars, minivans, and sports utility vehicles.

4
bulk of its new launches one every 12 to 18 months over the next few years.
xv
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. 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,
xvi
Michael Boneham (Boneham), President and
Managing Director, Ford India Pvt Ltd, said.

The Figo offered a platform for Ford to enter the vehicle market, affordably without sacrificing
style and comfort. According to experts, while affordability and practicality were of great
importance in this segment, buyers were not willing to sacrifice on style and performance. The
Figo was expected to be a perfect combination of style and affordability.
xvii

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 market needs. Ford designers set out to
create an attractive exterior coupled with a stylized and exquisitely crafted interior that gave
generous proportions and better value for money. Creating appeal and communicating value to
the customer starts with good design You want a car that reflects and makes a statement about
you,
xviii
said Emily Lai, color and materials Design Manager for Figo. Boneham 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 Ikon and the
subsequent Fiesta, was the segment to be present in the country, what with a growing affluent
middle class.
xix
Ford argued that the size of the vehicle did not matter as long as the price was
right and consumer saw a value equation with the offering.
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, Bangalore
and Lucknow, a smaller, second-tier city. Each of the men represented the core target customer of
the new car. Ford believed that newly married young men, in their mid-twenties, 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

5
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 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.
xx

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.
xxi

Fords learning through the past and the marketing research 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.
In March 2009, Ford had conducted Consumer Immersion an ethnographic workshop with
target customers for top management and marketing.
DESIGNING A CAR MATCHING THE NEEDS OF CUSTOMERS
Ford Motor Company President and CEO Alan Mulally stated that the new Ford Figo had been
designed and engineered to compete in the heart of the domestic India car market.
xxii
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.
xxiii
Ford
Figo Shared key elements of Fords 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 and engineered in India.
xxiv
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 Fords Asia Pacific & Africa product developments head
office was located in Bangkok, Thailand.
xxv
The Figo was based on the Europes Ford Fiesta
xxvi
.
13

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
given the go-ahead to apply a near-clean sheet approach to both the interior and exterior.
xxvii

The Figo was compact at 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 (Indias) city roads.
xxviii
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.
xxix

13
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 input from Ford Australia.

6
According to Scott Strong, Ford Asia Pacific and Africa (APA) design director, design teams
initial concepts were well received by Indian customers and received positive feedback from
research clinics. With the backing of 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.
The new designs were tested at a second round of customer clinics and received a good response
from group of potential Figo buyers.
Quality, substance and generous proportions were evident 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 sculpted bonnet of its distinctive face to the subtle
integrated spoiler and chamfered window shape at the rear, 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 side indicators, and additional light-catching sculpting in the lower
bodyside which combined to communicate the solidity, substance and protective safety of its
design.
The Ford Figos large side window shape was another key kinetic design feature hinting at the
comfort and spaciousness awaiting occupants' front and rear. The side window graphic was
executed with a blacked-out 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 Figos bold wheel arches signaled its agility and solidity.
Beyond design, Figo had lifestyle features like Bluetooth connectivity, 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
The prototype development process started with a thorough understanding of the needs and
requirements of the target market. A highly advanced three-dimensional imaging computer
system
14
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, the items like
seats, seat belts, mirrors and so on, were made 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 VII for Specifications of Ford Figo).
Both these engines were manufactured at the companys new 250,000 capacity engine plant near
Chennai.
xxx
Ford used the Three-Wet High-Solids paint technology, which gave a 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.
xxxi
Were confident that
the new Ford Figo will be extremely attractive to Indian car buyers, said Boneham.
xxxii

14
This is the Human-Machine Interface to ensure the driver doesnt have to reach out too much for any of
the controls.

7
PRODUCT DEVELOPMENT
The Figo was developed by engineers of the Asia-Pacific in consultation with Indian
Engineers.
xxxiii
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.
xxxiv
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.
xxxv
To enable this Ford did benchmarking
exercises against the key rivals on component pricing, on scheduled maintenance and fuel
economy. 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.
xxxvi

According to the company, at Ford, Purchasing (as a department) 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, the Purchasing team was
involved closely in nearly every product decision.
TESTING
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 kilometres all over India at the moment. We have gone through huge testing regimes all over
the world.
xxxvii
The objective of this was to test the car rigorously prior to launch and provide
feedback to the company.

A 3.2 kilometre testing facility was designed to provide engineers with
vehicle feedback under real world conditions to evaluate vehicles for squeaks and rattles, braking
performance, steering manoeuvres 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 vehicles reached market. It also used the Internet for
consumer comments in auto sites, chat rooms and blogs.
xxxviii

TAKING IT TO THE MARKET
By the second half of 2009, the Ford Figo was ready for its launch. In September 2009, Ford
revealed its Figo model in New Delhi. Alan Mulally claimed that Figo would be a game-changer
for Ford India. He said, The Figo should help us make considerable gains in India, where we have
had not much presence in the market till now. We do not operate on the basis of market share but
on customer demand and products.
xxxix
Figo was to be launched in early 2010 in the price range of
Rs. 349,000 to Rs 442,000 for the petrol version and Rs 447,000 to Rs 529,000 for the diesel
version.
xl
According to Boneham, Figo offered more features, interior space, technology and
durability than other vehicles at this price in the segment.
xli
We focused on parts and keeping
their cost down. The components are built in India. This was a significant strategy to get the cost
down first, so we could price-position the car right,
xlii
he added.

8
Industry observers 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. In a 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? The team at Ford also saw it as a very big challenge
as the company really needed to make its presence felt as it was one of the first multinational
automotive company to enter India, but till then, did not have an offering in the highest growing
segment. How could they effectively take the Figo to the market?

9
Exhibit I
Classification of Passenger Vehicles as per SIAM
Segment Length Engine Size Example
A1 - Mini Up to 3400 mm Upto 800 <1000cc M800, Nano
A2 - Compact 3401 to 4000 mm 1000cc to <1600 cc Alto, Wagon R, Zen, i10, A-Star, Swift, i20, Palio, Indica
A3 - Midsize 4001 to 4500 mm 1600cc City, Sx4, Dzire, Logan, Accent, Fiesta, Verna
A4 - Executive 4501 to 4700 mm 2000cc Corolla, Civic, Optra, Octavia
A5 Premium 4701 to 5000 mm 3000cc Camry, E class, Accord, Sonata, Laura, Superb
A6 - Luxury Above 5000 mm 5000cc S class, 5 series
B1 - Van Omni, Versa, Magic
B2 MUV - Multi Utility Vehicle /
MPV - Multi Purpose Vehicle
Innova, Tavera, Sumo
SUV Sport Utility Vehicle CRV, Vitara
cc means cubic centimeter
Adapted from www.siamindia.com

10
Exhibit II
An Overview of Manufacturers of Passenger Vehicles in India - As of September 2009
Company Name
Year of
Establishment
Vehicles
Manufactured
Models
Small Car Models and their Prices
(in Rs.)
Hindustan Motors Ltd, New
Delhi. (Collaboration with
Mitsubishi Motors, Japan)
1942 Passenger cars,
Sports Utility
Vehicles (SUVs)
Ambassador, Pajero,
Lancer, Lancer Cedia,
Outlander, Montero.

None
Maruti Suzuki India Ltd,
New Delhi.
SUVs.
Maruti 800, Maruti
Omni, Alto, Gypsy,
Versa, Wagon-R,
Esteem, Zen Estilo,
Baleno, Vitara, Swift,
A-Star, SX4, Ritz.
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
DaimlerChrysler India
Private Ltd, Pune
1994 Passenger cars Benz C-Class, Benz E-
Class, Benz S-Class,
Benz SL-Class
None
Fiat India Private Ltd, Pune. 1997 Passenger cars Sienna, Palio Stile, Palio
Stile Multijet. Petra,
Uno, Linea, Grande
Punto, Fiat 500
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
Honda Siel Cars India Pvt.
Ltd, Greater Noida.
MPVs
Honda Accord, Honda
CR-V, Honda City,
Civic, Honda Jazz.
Honda Jazz Rs 698,000

11
Company Name
Year of
Establishment
Vehicles
Manufactured
Models
Small Car Models and their Prices
(in Rs.)
Hyundai Motors India Ltd,
Chennai.
SUVs
Santro Xing, Getz,
Accent, Verna, Sonata,
Terracan, Tucson, i10,
i20.
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
Toyota Kirloskar Motors
Private Ltd, Bangalore.
1997 Passenger cars, SUVs
and MPVs
Innova, Corolla, Camry,
Prado, Land Cruiser,
Fortuner

None
Skoda Auto India Private
Ltd, Aurangabad.
2001 Passenger cars Superb, Laura , Octavia,
Fabia

Fabia

Rs 490,093
Audi AG, 2004 Passenger cars and
SUVs
Audi A4, Audi A6, Audi
A8, Audi TT Audi Q5
and Audi Q7, Audi R8.

None
BMW India Private Ltd,
Gurgaon.
MPVs
BMW 3 Series, BMW 5
Series, BMW 6Series
BMW 7 Series

None
Nissan Motor Company Ltd. 2008 Passenger cars and
MPVs
X-Trail, Maxima. None
Porsche AG 2003 Passenger cars and
MPVs
Boxster, Cayman, 911,
Panamera, Cayenne.
None
Tata Motors Limited,
Mumbai.
MPVs, Trucks.
Nano, Indica, Indica
Vista, Indica Xeta,
Indigo, Sumo Grande,
Safari

Nano Rs 115,000 - Rs 172,000
Indica V2 Rs 338,500
Indica Xeta
(petrol)
Rs 314,250
Indica Vista Rs 447,400
Compiled from various sources

12
Exhibit III
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.

13
Exhibit IV
Features of Various Small Cars in India
Maruti Alto Hyundai i10 Maruti Swift Tata Indica V2 Hyundai i20 GM Spark
Model Petrol Petrol Petrol/Diesel Petrol/Diesel Petrol/Diesel Petrol
Engine power
(in bhp
15
)
46 bhp 66 bhp 87 bhp (petrol)
75 bhp (diesel)
64-70 bhp (petrol)
53-69 bhp (diesel)
79-100 bhp (petrol)
89 bhp (diesel)
63 bhp
Seating capacity 5 5 5 5 5 5
Variants 3 4 5 5 8 6
Length 3495 mm 3565 mm 3760 mm 3675 mm 3940 mm 3495 mm
Torque
(in Nm
16
)
62 Nm @ 3000
rpm
99 Nm @
2800 rpm
113 Nm @ 4500 rpm 140 Nm @
3000 rpm
220 Nm @ 1750 rpm 90.3 Nm @
4200 rpm
Fuel efficiency
(in kmpl)
17.6 12-16.3 14-18 (diesel)
12-17 (petrol)
12.2-16.6 (diesel)
10.5-14.5 (petrol)
19-22.6 (diesel)
11.3-16.1 (petrol)
12.3-16.9
Maximum speed 137 kmph 149 kmph 160 kmph 135 kmph 156 kmph 164 kmph
Doors 5 5 5 5 4 5
Compiled from various sources.
Contd

15
Brake horse power
16
Newton meter

14

Contd

Source: Ford Figo v/s Rivals: Comparative Specs Chart, http://motoroids.com, March 11, 2010

15
Exhibit V
Comparison of Ford Indias Sales to Total Passenger Vehicle Sales in India

Adapted from www.automonitor.co.in

Exhibit VI
Fords Approach to New Product Development
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 2000
17
, 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.
UNDERSTANDING THE CUSTOMER
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.
Ford ensured its marketing experts used an intensive research and analysis process to
understand its potential customers and their needs. Ford had a brand DNA and hypothetical
target customer for each of its new brands.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 would listen to, and where they shopped. This
complete approach helped the product development team focus on designing a vehicle that
would meet customers needs and desires.
Contd

17
Previously in 1995, Ford had embarked on an ambitious restructuring plan called Ford 2000, which
included merging its North American, European, and international automotive operations into a single
global organization. Ford 2000 called for dramatic cost reductions to be obtained by reengineering and
globalizing corporate organizations 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 Europe). By making processes and products globally common, Ford
intended to eliminate organizational and process redundancies and realize huge economies of scale in
manufacturing and purchasing.

16
Contd
In addition to product- and brand-specific market research, Ford had a team specifically
dedicated to tracking shifts in 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.
xliii

The team found that the trends of consumers needs included:
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
Increasing desire for information and connectivity on-the-move to make the most of
their time.
xliv

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 that 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.
xlv

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.
xlvi

In order to refine a future niche vehicle, Market Research took 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. By taking a disciplined approach to gathering consumer feedback, Ford gained a
better understanding of consumer expectations.
Compiled from various sources.


17
Exhibit VII
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
Compiled from various sources
Few Images of Ford Figo

Contd

18
Contd

Interiors of Ford Figo

Source: Ford India


19
End Notes:

i
Nikhil Gulati and Santanu Choudhury, Ford Targets India Market with First Small Car,
http://online.wsj.com, September 23, 2009
ii
Ford Rolls Out Figo at Rs 3.49 lakh, www.newsgaze.com, March 13, 2010
iii
Fords Global CEO Reveals New Ford Figo Targeting India Market and Export Sales,
http://media.ford.com, September 23, 2009
iv
Prodding the Giant, www.dhanbank.com, November, 2010
v
Overview of Indian Automobile Industry, www.automobileindustryindia.com, 2010
vi
Indian Passenger Vehicle Industry: Growth Momentum to Continue, www.icra.in, March, 2011
vii
www.team-bhp.com.
viii
India is the Second Largest Small Car Maker, www.siliconindia.com, September 25, 2009
ix
x
September 2009 Indian Car Sales Figures & Analysis, www.team-bhp.com. October 7, 2009
xi
xii
www.marutisuzuki.com.
xiii
The Ford Focus a Car for the Millennium, www.business2000.ie
xiv
Julian Lorkin, Marketing in India: How the Rubber Hit the Road for Ford's Figo,
http://knowledge.asb.unsw.edu.au, November 29, 2010
xv
N. Ramakrishnan, Small Car Segment is Where All the Action is: Ford India Chief,
www.thehindubusinessline.in, February 3, 2010
xvi
Pawan Luthra, How to Market in India: Ford India MD, www.indianlink.com.au
xvii
Ford Figo Goes Entry Level, www.yworld.co.za
xviii
Ibid.
xix
xx
@ Ford India Special, www.at.ford.com, November 2009
xxi
Ibid.
xxii
xxiii
The Ford Focus a Car for the Millennium, www.business2000.ie
xxiv
Ford Figo - Built in India, Developed in Australia. And 2012 Ford Ranger,
www.theautoindustrieblog.com, September 30, 2009
xxv
Ibid.
xxvi
Ford Figo - Built in India, Developed in Australia. And 2012 Ford Ranger,
www.theautoindustrieblog.com, September 30, 2009
xxvii
New Ford Figo Brings Kinetic Design for Economy & Small Cars in India, www.zimbio.com,
March 11, 2010
xxviii
Jeremy Cato, Ford Figo Takes on India , www.theglobeandmail.com, March 9, 2010
xxix
Ford Figo Goes Entry Level, www.yworld.co.za

20

xxx
Ford Gets Aggressively with Figo Pricing, www.thehindubusinessline.com, March 9, 2010
xxxi
Ford Introduces New Figo Hatchback for Indias Burgeoning B-segment, www.mazdas247.com,
September 24, 2009
xxxii
Ford-introduces-new-Figo-hatchback-for-India-s-burgeoning-B-segment, www.mazdas247.com,
September 24, 2009
xxxiii
Murali Gopalan, Ford to Use Figo Inputs for Global Car Plans, www.thehindubusinessline.com,
April 1, 2010
xxxiv
xxxv
xxxvi
xxxvii
xxxviii
Market Research Drives Product Development at Ford, www.reliableplant.com, June 6, 2009
xxxix
Bhattacharya Sindhu, Figo Will be a Game Changer for Ford in India, http://findarticles.com,
September 24, 2009
xl
xli
Ford Rolls Out Figo at Rs 3.49 lakh, www.newsgaze.com, March 13, 2010
xlii
Julian Lorkin, Marketing in India: How the Rubber Hit the Road for Fords Figo,
http://knowledge.asb.unsw.edu.au, November 29, 2010
xliii
Understanding Changing Customer Needs, http://corporate.ford.com
xliv
Ibid.
xlv
Market Research Drives Product Development at Ford, www.reliableplant.com
xlvi
Ibid.

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