Flawed strategy? Why US carmakers failed in the India automotive scene
US carmakers saw Indian market through the US prism
The US carmakers have a very little presence in the Indian car market. Leaving out Jeep, there are hardly any other major US car brands that have been able to dent the market in the country. Ford, the US-based automobile giant, has said it will be closing its two factories in India and will only sell high-end models in India through the import route. With Ford India exiting India, the question is, what went wrong for these American car makers who could not find a place in the Indian automobile scene.
US carmakers failed to read India mart
One of the biggest reasons for the failure of American carmakers to find a place in the Indian automobile market was the lack of India specific models. US carmakers like Ford were more focused about bringing global cars to India. Ford was a late entrant to the Indian scene too.
A host of factors contributed to the untimely exit of Ford from India. Industry experts say that Ford could not read the Indian market properly. It also did not customize its cars according to Indian requirements. Their product strategy was also flawed. For quite some time, small cars ruled the roost in India. Other carmakers like Maruti Suzuki and Hyundai tweaked their products according to the Indian market conditions,and focused on small cars, while Ford and General Motors failed to read the market requirements. None of the US carmakers had small cars in their inventory. They also did not customize their products to suit local preferences.
The US car makers were seeing the Indian market through the US prism. The Indian market was obsessed with mileage, while Ford focused on engine power and performance. Competitors like Maruti Suzuki, Tata Motors, and Hyundai tweaked their products as per Indian requirements and soon enamored the Indian buyers. This left Ford and other US carmakers high and dry.
US carmakers viewed India from a global window
The Pan Asia strategies of US car makers came about as flawed. The competitors had in place a solid product plan for India and after succeeding in carving a niche in the country, they diversified and started an Asia Pacific product strategy and then the global plan. Ford did just the opposite and viewed India from a global level.
Ford’s exit will hardly benefit other carmakers as it had just a miniscule presence in India. However, the absence of two popular models in the utility vehicle segment — EcoSport and Endeavour will benefit major players in this segment. Over the past couple of years, Maruti Suzuki, Hyundai and Tata Motors had been focusing on the UV segment.