Ford to make Ikon more affordable

The side effect of Ford India's launch of a new sedan next month could be a shake-out in the premium hatchback segment of cars as the company plans to make its existing sedans more affordable. Ford's new sedan Fiesta is set for launch in mid-November.

Simultaneously, the company plans to calibrate financing measures for the purchase of its older sedan, Ikon, to make it more affordable.

V Sivaramakrishnan, vice-president (marketing, sales and service), Ford India, provided the context for the company's plans for Ikon.

Ford's study showed that 27 per cent of the Ikon owners were first time buyers; they bypassed hatchbacks to shift from two wheelers to sedans. Rising salaries in the information technology industry has contributed to this trend.

Moreover, people who have owned an Ikon for three years and more are a significant target for the new Fiesta, added Sivaramakrishnan.

Ikon has been the flagship of Ford India and more than one lakh units have been sold since its launch in November 1999. This fiscal, however, Ikon sales have been flat and Ford's total sales have fallen in relation to last year.

Sivaramakrishnan said that sedans, in general, scored high in terms of status value. A more affordable sedan could bring in a set of new buyers, he added.

An industry hand felt that Ford's marketing and promotion efforts recently have been aimed at attracting more people towards the entry level Ikon. The prices of base models of sedans such as Ikon and Maruti Esteem are between Rs 4.5 lakh and Rs 5 lakh. Premium hatchbacks such as Maruti Swift is priced in the range of Rs 4 lakh to Rs 5 lakh.

Sivaramakrishnan said that Ford planned more innovations in financing Ikon purchases to go along with the launch of the Fiesta.

The size of the equated monthly installments (EMIs) in financing car purchases have had a critical role in influencing decisions. Ford plans to make the EMIs for the Ikon more attractive and also add other features that would make running cost of a sedan relatively more manageable.