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June 2, 1999

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The Rediff Business Interview/ Philip Spender

'There's room for a small premium car in India. Ford will dominate this segment'

Phil Spender, MD of Ford India Limited

Come October and the Ford Motor Company will launch its mid-size new car Ikon in India. Ford already has a presence in the Indian market in the Escort.

Ikon's price will remain a secret until its launch. Ford India's managing director Philip G Spender, a Ford veteran with 24 years' experience in cross-functional
Ford logo assignments in various countries, is keen on ensuring that everything goes off well for Ford in India. The company has an ultra-modern vehicle manufacturing plant at Maraimalainagar, near Madras.

A car is an expression of the individual who owns it. So it must be desirable. It should be exciting and grab a customer's attention instantly. It should be safe and dependable. Above all, it should be good value for money, says Spender.

In an interview to Special Correspondent Syed Firdaus Ashraf, he spoke about the new car Ikon, the Indian car market, Ford's plans for it and what it takes for multinational corporations to succeed in India.

Email this interview to a friend Don't you think Ikon is a late entrant to the Indian market where mid-size cars abound?

We introduced the Escort in 1996, much before other leading players forayed into India. So, we know how to do things quickly. Today, the price wars and the excessive competition mark the market. We hope that by the time Ikon hits the Indian roads, these wars and competition will become things of the past.

Talking of competition, how will Ikon fare in India?

Ikon is smaller than Escort. It is large inside and well packaged. About 70 per cent of its content will be localised. It is designed and engineered in Germany and the United Kingdom but will be built in India, by Indians, for Indians. And it is more affordable. So, we are planning to expand the project for this car.

Is Ikon Euro-II-fit?

Ford is a leader as far as the environmental norms are concerned. We welcome the Euro II norms. Our plan is to work with the government and give a solution for the environmental problems.

Phil Spender, MD of Ford India Limited There are 50 car models in India. Is there room for Ikon?

I think there will be a segment for Ikon which I will call a small premium segment. We will dominate in that segment.

Do Indian consumers need a small premium car?

India is a large country and the choice varies at various places. We are looking at a consumer who is on the lookout for something more than the basic need of a transport. This car is not a big car, neither is it expensive like Escort, Honda and Opel Astra.

At what rate do you expect volumes to rise?

We will first create the brand image and only then chase the volumes. We are trying to build up expectations, a customer support system and a good relationship with prospective consumers. At present, I can only say that we are looking at a range of 18,000 to 25,000 cars. It also depends on the economic activity at that time.

Chaotic traffic conditions keep many people in urban areas from buying cars. Does not Ford find this factor a hurdle to its plans?

I think roads have to be developed. But again, history shows that as the volumes of motor vehicles grow, they create a demand for roads and infrastructure. There are various infrastructure projects which are underway in many cities and we encourage them.

What has been Ford's experience in India?

We have learnt a lot in India. The Indian consumers are very demanding. That's what we've kept in mind while shaping the Ikon. As far as the governments are concerned, we've been supported and encouraged by various governments to do business here; we appreciate that. We've also recruited local people; it has been a very good experience working with them. We've taught them the art of making motor vehicles.

Given the fact that a car still remains a luxury for the majority of the middle class, has the Indian consumer matched your expectations?

Affordability is a big issue in India. The Indian consumers are very demanding and want a perfect satisfaction for what they pay. We are learning that and today they have a choice as various new entrants are coming into the market. So, I think the basic issue is you have to create exciting products, right value and a product which is in a reasonable price range. So, the price is not the only factor.

Maruti has an 80 per cent market share.

Maruti has been in existence for the last 15 years. Their strategy is that they are chasing volumes at low cost, but we are not looking at that aspect. We are looking at customer satisfaction. We provide value and our aim is to achieve 10 per cent of the Asia-Pacific market. We plan in a consistent manner to do that.

Do you think political instability in India is bad for the car market?

Any instability is not helpful for the country. For any returns on investment, political as well as economical stability is a must.

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