Car war: Ford takes cue from Maruti

Plans to sell 27,000 Ikon by end of 2004, prices reduced by Rs 20,000 to Rs 60,000.

Ford India today cut prices of the various models of its best-selling mid-sized sedan, the Ikon, from Rs 20,000 to Rs 60,000. The company also introduced a new basic version of the Ikon Lxi, fitted with a 1.3 litre Rocam engine, for Rs 449,000 (ex-showroom, Delhi).

Ford's price cut comes close on the heels of Maruti Udyog Ltd's decision in June this year to slash prices of its mid-sized sedan, Esteem, by over Rs 40,000.

"The mid-size segment is clearly the fastest growing in the Indian market at 45 per cent. We are well positioned to take advantage of the market conditions and we expect the new launches to propel us to the lead in this high growth segment," David Friedman, president and managing director,

Ford India, said at a news conference here today. According to Friedman, with Ikon sales also growing by 50 per cent and the company's plant moving onto a second production shift, Ford is in a position to offer an all new line up at much greater value. "We are benefiting from better capacity utilisation and we'll pass on the benefits to the consumers," he added.

By the end of 2004, Ford India expects to sell nearly 27,000 Ikon compared with 18,500 last year. After the price cuts, the 1.3 litre Ford Flair will be available for Rs 479,000, compared with Rs 500,000 earlier, and the price of the 1.6 litre Ikon Exi comes down from Rs 608,000 to Rs 549,000.

Ford India will move to a second production shift this month at its plant in Maraimalainagar near Chennai. Readiness for the move has included ramping Ford takes Maruti cue, cuts prices of Ikon up capacity of the supply base and an aggressive expansion of the distribution network across the country.

Ford has recruited 700 new employees at its manufacturing plant and its sales locations will go up to 105 by the end of the year.

"The expansion is also in readiness for our next big launch later this year," said Friedman. It is being speculated that the company will roll out its small car called Ford Fusion.

"According to our estimates, there are nearly a million mid-size cars on Indian roads that are two to six years old. And the owners of these cars would be paying EMIs of Rs 15,000 upwards. Now with lower tax rates and interest rates a lot of them would be willing to look at new buys. It represents a huge pool of customers for the industry," he explained. The sales of mid-size sedans in India is expected to go up to 140,000 units this year compared with 100,000 in 2003-04.