Ford Motor Co made a profit in India for the first time in a decade in the last fiscal year, signaling that a strategy conceived two years ago by the U.S. car manufacturer for one of the world's most competitive car markets is starting to show some success.
NEW DELHI: Ford Motor Co made a profit in India for the first time in a decade in the last fiscal year, signaling that a strategy conceived two years ago by the U.S. car manufacturer for one of the world's most competitive car markets is starting to show some success.
Over the past two decades, Ford has invested US$2 billion in India, which has become a major growth area for car manufacturers. Car sales rose 8 percent to 3.3 million last year and India is set to become the world's third-largest market by 2020 with sales of over 5 million cars, according to consultant IHS Markit.
Ford's new strategy gives greater autonomy to the local management team, and will contribute to a global restructuring plan to save US$11 billion over the next few years by cutting costs, forming partnerships and investing in new technologies.
Ford India made a profit of 5.26 billion rupees (US$72 million) in the fiscal year that ended on March 31 compared with a loss of 5.21 billion rupees a year ago, according to a regulatory filing.
"We realized we need to have a sustainable and profitable business in India," said Mehrotra, adding that Ford looked at its brand, products, cost and scale to improve efficiency.
For instance, in its Figo hatchback that sells for as little as 600,000 rupees (US$8,200), Ford used imported floormats that cost more than locally sourced ones. During a review under EMOM it learned that buyers don't really want imported mats, he said.