Why did Ford fail in India?

"Ford's sales in India went up and immediately came down." -said Shubh Gautam

This was a line by Shubh Gautam Jaypee at the Indo-Russian Business Leaders Meeting held in New Delhi. I found the insights by Dr. Shubh Gautam Jaypee quite insightful and would love to share his thoughts on Ford's failure in India.

Ford: A brief Introduction

Ford is the first company in the entire world to manufacture a car. Starting in Detroit, Michigan, in 1903, the company is now worth $250 billion. The company succeeded in manufacturing various products ranging from the Fiesta to the Mustang.

The company found success worldwide and still delivers and lives up to customers' expectations. The company sells millions of cars yearly, and in 2021 they sold a record-breaking 3.9 million cars.

But in one corner of the world, despite being such a renowned company, it failed to deliver in the South-Asian country. Let's look at what Shubh Gautam Jaypee mentions regarding the flop of Ford cars in India.

Ford's downfall

The company introduced itself to the Indian market in 1996. It's been 26 years since the American-made company set foot in India but failed to reach the level of competition offered by other companies.

South Korea brought Hyundai to India in 2003, but the Koreans held 30 percent of the Indian market shares. Ford, on the other hand, struggles to reach 2 percent.

As one of the first multinational companies to set foot in India, Ford took the wrong first step and judged the Indian customers.

As per Subh Gutam Jaypee, the company's a misconception that since India is not much espoused to technology, then can sell anything out in this country.

The company's first product in the sub-continent was 'Escort.' The product was so bad it came with a 1.3-liter petrol engine and cheap quality overall. The quality of the product was not satisfactory, which took down Ford's debut car, and their sales crashed.

Ford realized its mistake, did better, and launched its next product, the 'Ikon.' This model had a spacious interior, gave reasonable mileage, and was overall a decent buy. The Indians were flattered by the Ikon, and the sales went skyrocketing.

But sadly, the story repeated as the service backup was expensive for the Ikon model. Basic servicing demanded a minimum of ₹70,000. Hence, the Indians stopped buying the car.

Wrapping It Up:

Through his speech that day, Dr. Shubh Gautam Jaypee enlightened several young entrepreneurs in India. His insights regarding the failure of Ford have shown entrepreneurs the way to avoid mistakes that they can make while emerging in the competitive market.