How the Figo changed Ford India's fortunes

Ford India's compact car or hatchback Figo crossed the 3,00,000 sales mark in its third year, the company said earlier this week. The car which has been a runaway hit helped Ford turn around its fortunes in India, analysts say.
 
The Figo, which was launched in March 2010, received 10,000 booking in the very first month. Within the first 100 days of its launch, the company had already received 25,000 bookings.
 
These numbers might not sound impressive in 2013 considering Ford India's latest offering - the EcoSport - has over 30,000 bookings to its credit in a fortnight or so, but back in 2010, it was a big deal for Ford India. The Figo helped Ford establish itself as a strong player in the small car market, where the biggest opportunity lay.
 
"Before the Figo, we were a niche player. We weren't in the market where 70 per cent of the sales were happening. With the Figo's launch Ford India's sales almost tripled, from 30,000 odd sales we went to 80,000-90,000 odd sales per year," Ford India spokesperson told NDTV.
 
Until 2010, Ford India's stable consisted of the Endeavour- a sports utility vehicle or SUV, and Classic- a sedan. But they didn't turn out to be the blockbusters Ford needed to entrench itself in the highly competitive Indian market.
 
"Yes, the Ford Figo worked where most of their other products didn't," auto expert Raj Kapoor said.  

It was Ford's first venture in the small car segment and they priced it right... it worked for them, he added.
 
Besides the pricing, Ford also got its network and spare parts policy right for the Figo, Mr Kapoor added.
 
Some other models - the Ikon, Escort, Mondeo and Fusion for example - had been discontinued by 2011. The Ikon was discontinued at the beginning of 2011 when the Fiesta was launched.
 
"Ford was literally bleeding in India. It was the launch of Figo that turned around Ford's fortunes in the country," a Kolkata- based Ford dealer said requesting anonymity.
 
In a way, it was Figo's pricing that made it a smash hit. Figo started at Rs. 3.5 lakh (petrol), but it was the diesel variant starting at Rs. 4.48 lakh that turned out to be the real crowd puller. Its competitor, Maruti Suzuki's Swift was more expensive.
 
The Figo has been a big turning point for Ford, but to put its success in perspective, the Swift continues to sell over 1,50,000 units even eight years after its launch.
 
It's a "far cry from what the Swift has achieved,"  Mr Kapoor said.
 
What's pretty clear, however, is the fact that Figo's success helped Ford establish a foothold in the most lucrative segment in India's most competitive segment.
 
Ford is now in a position to grow exponentially. Its compact sports utility vehicle - the EcoSport - has become a big success after its launch in July.
 
And once again, the price point has been the clincher. Starting at Rs.5.59 lakh, the EcoSport is much cheaper than its nearest competition- Renault's Duster, which starts at Rs. 7.99 lakh.
 
The EcoSport is unlikely to weigh on Figo's sales though.
 
 "There is no cross-shopping happening between the EcoSport and Figo and Figo is expected to report robust sales going forward as well," Ford India spokesperson said.
 
With EcoSport's launch, Ford India seems to have got the recipe just right at a time when the auto industry is going through a major slowdown.

Source: NDTV Profit

Tavera Recall: GM Shows the Door to 35 More Execs

Officals from Talegaon, Halol plants and its corporate office in NCR asked to leave

By: KETAN THAKKAR, MUMBAI 

An internal investigation into General Motors India’s controversial Tavera multi-utility vehicle recall has led to additional 30-35 key executives at its Indian operations being asked to quit, after the exit of senior R&D officials at the US headquarters last week. ET learns GM India’s HR has axed several dozen officials on Monday across its two plants in Talegaon, Maharashtra and Halol, Gujarat and its corporate office in the National Capital Region from various functions of quality, engineering and operations. 
In an email response, GM India’s spokesperson told ET, “As per company policy, we do not comment on internal personnel matters.” 
Last month, in a letter which ET reviewed, GM India admitted to the government that its internal probe had revealed the company violated testing norms and its employees re-fitted already approved engines in the new Tavera models sent for inspection, in an attempt to meet the specified emission norms. 
GM also acknowledged that the weight of several of its models was manipulated to comply with less stringent emission norms. The company had suspended production and sales of two Tavera variants after it ‘discovered’ compliance failures and recalled over 1.14 lakh units of Tavera sold since 2005. 
The government has formed a committee constituted by the ministry of heavy industry — the nodal ministry for the auto industry — under Natrip CEO Nitin Gokarn with the mandate to investigate specific checks on macro-manufacturing practices of auto companies. The findings of the report are likely to be released in the next few weeks. Greg Martin, spokesperson of GM at the headquarters in Detroit, had told ET last week, “GM’s investigation into our recall of Tavera, which is built and sold exclusively in India, identified violations of company policy.

Source: The Economic Times

Slowdown Checks In, Hotel Occupancy Dips

With a slowing economy, drop in corporate travel and a large supply of new rooms, hotels in India's top metro cities have seen a 10-15% drop in occupancy since the beginning of the year. Occupancy levels in hotels in Delhi, Mumbai, Bangalore and Chennai currently stand under 60%. 
What is making the situation more alarming is that in a double whammy room rates too have dropped 15% in this period. “Our economy has slowed, Europe has slowed and everyone is now competing for the same pie. Occupancy for city hotels in Mumbai are down 10%,” says Dinesh Khanna, executive director at Eastern International Hotels, which owns the Novotel in Juhu. 
While supply of hotels rooms have increased by about 40% in the last four years, demand for rooms has grown only 15%. Consequently, occupancy levels have dropped and hotels rates are down 30% in the last four years. 
In Delhi, for Le Meridien, this June was one of the worst with occupancy dropping 15% over last year and average room rates falling 20%. “Room rates and occupancies are closely linked and a combination of dropping rates and dropping occupancy is lethal,” says Tarun Thakral, chief executive officer of the hotel. 
In 2012-13 alone, close to 12,782 new rooms were added across the country, taking the total supply of branded hotel rooms up to 96,000. India is expected to add another 54,000 hotel rooms over the next three to four years, says hotelconsultancy HVS. NCR and Chennai have both seen a large amount of new room inventory come in. In 2012, about 1,200 rooms became operational in Delhi-NCR, 800 in Mumbai, 1,300 in Bangalore and 800 in Chennai impacting occupancy levels. 
Add to that the decline in corporate traffic from the Eurozone and the US in the last 8-12 months. “Corporates are even asking executives to cut down on domestic trips. Even if one has to go, they advice them to take the evening flight back to reduce hotel stays,” says Geeta Jain, chief executive officer (CEO) at travel management company Carlson Wagonlit India. 
Corporate travel had been hit considerably in 2008-09 but had bounced back in 2010 and 2011. While the reality of the situation is not lost on any of the hotels, some are trying to hold on to their occupancy levels by slashing prices. “It is clear that demand is weakening across India. When demand drops, hotels start acting irrationally and drop prices. Each starts going after the others business,” says Patu Keswani, managing director of Lemon Tree Hotels.

Source: The Economic Times
By: RAVI TEJA SHARMA & DIVYA SATHYANARAYANAN

BMW India Hikes Prices, Mercedes Benz to Follow Soon

Luxury carmakers such as BMW have announced a fresh round of price increases prompted by expensive imports on the back of the depreciating Indian rupee and rising input costs. The German carmaker that sells two brands — the BMW and the iconic MINI — will increase prices by as much as 5% from August 15, across its product range. 
The move closely follows another German luxury car manufacturer Audi, which has increased price last month by 4% across its model range available in India. It led to an increase of . 1.52 lakh on the Q5 price (a luxury compact sports utility vehicle) and the price of Audi A6 sedan increasing by . 1.80 lakh. While the top-end Audi R8 price increased by about . 4.42 lakh. Luxury carmakers are yet to feel the impact of a slowdown that other carmakers are experiencing. In terms of sales, the regular mass market carmakers have seen sales declining 5% in the first half of 2013 and are likely to face stagnated demand in the coming months too. “Market conditions are challenging, but luxury segment has seen some propelled demand due to fresh launches. A depreciating rupee and the rise in input costs have made increase the prices of the entire range, though we are offering customised and innovative finance options from Audi Finance to make the purchase more attractive for our customers,” said Michael Perschke, head, Audi India. 
“The weakening of the rupee is a concern and we have been monitoring the situation closely. However, we have not yet decided on a timeline or a quantum for increasing the prices, but it looks inevitable,” says Eberhard Kern, MD& CEO, Mercedes-Benz India. 
Other players in the Indian market for the super luxury segment have not decided on the exact quantum of hike applicable for the Indian customers. They say that there is an impact being felt from the weakening rupee, but no decision to increase prices has been taken now. “All brands we represent have an annual increase in prices which is implemented by the factory and is a global hike. Rarely do we see market specific price hike owing to local economic trends or currency fluctuation,” said Ashish Chordia, chairman of Shreyans Group. Shreyans is the official India importer for Bang & Olufsen, Bombardier Recreational Products, Ducati, Ferrari and Maserati in India. 
BMW India has not decided the quantum of the hike. “Following a path of sustainable growth, BMW Group India has always been built on long-term thinking and responsible action. We are making price decisions with all due care and consideration ensuring that they pay off in the long-run and the real quantum would be announced in next few days,” Philipp von Sahr, president, BMW Group India, said.

Source: Economics Times
By: CHANCHAL PAL CHAUHAN 

Rupee hits 61.16 against dollar, nears record low

The Indian rupee looks set to surpass the record low of 61.21 against the U.S. dollar hit on July 8. The partially convertible currency declined to 61.16 in early trade on Tuesday against Monday's close of 60.88/89.

Fresh weakness in the rupee came even as the dollar dipped against a basket of major currencies. The rupee traded at 61.12 as of 09.10 a.m.

The prospect of further rupee falls is leading traders to expect additional measures from the RBI. Standard Chartered Bank expects the RBI to announce more measures to tighten cash conditions if the improvement in cash situation continues.

Traders broadly expect the pair to hold in a 60.50 to 61.50 per dollar range during the holiday-shortened week. Financial markets will be closed on Friday for a religious holiday.

In the offshore non-deliverable forwards (NDF), the one-month contract was at 61.47 while the three-month was at 62.34.

Jamal Mecklai of Mecklai Financials told NDTV that the NDF market or the currency futures market is not a major driver of the Indian currency. The government and the Reserve Bank should instead focus on growth, he added.


Source: (With inputs from Reuters)