Ford's Fiesta-based compact SUV 'EcoSport', the second most important car launch this year in India after the Honda Amaze, has come with a cracker of a starting price of around Rs 5.6 lakh. The car launched today with a 1.5-litre petrol variant as the base model, followed by a 1.5-litre diesel variant and another premium petrol variant sporting the 1-litre turbocharged Ecoboost engine.
With this aggressive pricing, the EcoSport's target would be customers of entry sedans such as the Maruti Suzuki Dzire and the Honda Amaze, and not the Renault Duster as was earlier believed. Ford would also aim to not repeat earlier pricing mistakes — while the Figo did well after its launch in 2010, the new Fiesta's high starting pricing of R8.23 lakh in 2011 meant volumes never really took off. Instead, the EcoSport will aim for a sweet spot between premium hatchbacks/entry sedans and compact SUVs.
"It's quite a bit smaller than the Duster and really feels like a bigger hatchback with better road presence and all-round view. So pricing has to reflect that. The only worry is that the market is not responding very well, so whether this will help Ford pick up overall volumes is the question," an industry executive said.
With around $2 billion worth of investments committed to India and a second plant in Gujarat expected to start next year (the first plant is near Chennai), the EcoSport is critical to success of Ford's India gameplan. This importance is underlined by the multiple visits paid by Ford's global president and CEO, Alan Mulally, for a single model — he came in January last year to unveil the EcoSport just before the Delhi Auto Expo, coming again this month to inaugurate nationwide deliveries of the EcoSport from Chennai. Globally, the EcoSport will be made at five plants, but Chennai will be responsible for exports to Europe as well.
The EcoSport is also expected to boost Ford's overall volumes, which have lagged for much of the last year — monthly total domestic volumes are now down to around 4,000 units from a high of around 9,000 units about a year back when the Figo hatch was doing well. With accumulated losses of around R1,400 crore in India and FY13 volumes declining 17% to 77.225 units, the EcoSport will have a tough task of bringing Ford India back to the black.
"The question is if in a depressed car market, the EcoSport will be able to create enough excitement so as to push up Ford's overall volumes. Any new launch creates a push," an industry analyst said. After car sales touched a 12-year low in FY13, volumes in April-May FY14 again fell 11% to 2.94 lakh units due to subdued consumer sentiment, rising fuel prices and high interest rates.
One of EcoSport's main competitors, the Maruti Dzire sells about 18,000 units a month and was the top-selling car in the country in May. The Honda Amaze, launched recently in April, sells about 6,000 units monthly while Renault's strong success, the Duster, sells around 5,200 units.
"I think the Mahindra Quanto would face the toughest competition from this in urban areas apart from entry sedans. The EcoSport will be a strong option for a rational buyer in an entry sedan segment," another industry executive said.
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