ord Motor Company recently announced that it is leaving India, saying goodbye to all the drivers it had hoped to lure with cars such as the Aspire, Endeavour and Freestyle.
No more aspiring and endeavoring in the competitive waters of India—Ford is freestyling out of the country.
The company will close its plants in Sanand and Chennai, laying off about 4,000 employees. Hopefully each of them will receive an Aspire or Endeavour as a parting gift, but perhaps they would rather have a Maruti.
Hormazd Sorabjee, editor of Autocar India, believes that Ford did not understand the Indian psyche and spent money unwisely. The company reportedly invested about $1 billion on the Sanand plant, which it opened in 2015.
“It is built like a Taj Mahal,” Sorabjee told CNN. “The western manufacturers just don’t think frugal.”
It may be built like a Taj Mahal, but Ford unfortunately could not make any money from tourists. All it could do was churn out cars that were too pricey for most car buyers. The Aspire and Freestyle cost twice as much as the Maruti Alto 800, but didn’t bring out twice as much envy from the neighbours.
After 25 years in India, Ford managed to capture only 2 per cent of auto sales in India, far behind the 45 per cent market share of Maruti Suzuki and the 17 per cent share of Hyundai.
“Despite investing significantly in India, Ford has accumulated more than $2 billion of operating losses over the past 10 years and demand for new vehicles has been much weaker than forecast,” Ford CEO Jim Farley told CNN.
The car market in India is not growing as fast as auto manufacturers had hoped. Annual sales were once projected to be 5 million cars, but have remained at about 3 million, and the growth rate has dropped from 12 per cent a decade ago to 3.6 per cent today, according to Reuters.
If you live in a big city and have to travel on roads that are already congested, you’re probably happy that auto sales are increasing at a slow pace.
Driving in Mumbai, for example, is stressful enough without having more cars on the roads. According to a recent survey by UK car-sharing company Hiyacar, Mumbai is the most stressful city in the world for driving.
Paris is second, Jakarta third, Delhi fourth and New York City fifth. Among those five cities, the only one I’ve driven in is New York City. That was quite stressful for me, partly because of all the drivers trying to get past me on both sides of the road, some of them signaling their intentions with their middle fingers.
As for Mumbai, I’ve watched videos of people driving in the city. If I ever need to travel by car in Mumbai, I would hire not just a driver, but also a doctor. The doctor would monitor my vital signs, make sure I don’t suffer a heart attack. Considering the congestion on city roads, it makes sense that many Indians prefer small cars. Not only do they occupy less space, they use less fuel and produce less pollution. And most importantly, they cost far less than the cars Ford is trying to sell.
While a car is often seen as a symbol of success, I see it mostly as a mode of transportation. It’s nice to have luxurious features in your car, but you have to pay extra for them, and it’s not always a wise investment, considering that cars don’t usually appreciate in value – they depreciate.
If you can afford to buy a luxury car, good for you. But don’t expect to get to your destination any faster than your friend driving a Maruti Alto 800.