Still in India only 25 to 30 people have a car per 1000 people. The car market is yet to expand further in the future. The entire economy cannot be judged by the failure of one or two companies.
What is the real reason for Ford leaving India?
American company Ford (Ford) will no longer make cars in India. 4 years ago today, General Motors also stopped making cars in India. The question arises that after all what problem are these foreign companies facing in setting up their business in India? Talking about the share of most of the world’s largest car companies in India, it is only 6 percent. Whereas when it comes to Ford, it occupied 2 percent of the Indian car market. But the debate that broke out in the media on this issue was different from all these things. A section said that leaving the country of companies like Ford and GM is a failure of the government. On the other hand some people started saying that the indigenous car company Tata forced Ford to leave India. However, both these things are exaggeration in the Indian economy.
However, Ford and General Motors did not get as much competition from companies like Tata and Mahindra, as they got competition from Maruti and Hyundai. There were many important reasons behind the failure of Ford and General Motors in the Indian market. The most important reason was Ford’s inability to focus on the segment of the Indian market that sells the most. That is, the cars whose cost is between 3 to 5 lakhs. Ford had no such model. In this segment, Ford had a ‘freestyle’ car, which starts at Rs 6 lakh. Whereas Maruti and other companies have many cars like Alto, WagonR, Swift which fall in this range.
These foreign companies lagged behind in 800 cc cars
India has the largest market for 800 cc cars. Ford has only Figo and Freestyle cars in this segment. On the other hand, Hyundai has many features like i20, Suzuki’s Swift and Baleno, Tata Motors’s Tiago and Altroz have occupied this segment. Secondly, Ford’s Figo and Freestyle are priced starting at Rs.6 lakhs, which makes it accessible only to the middle or lower middle class depending on the Indian market. Hawaii Suzuki has Alto, which starts from around Rs.3 lakh. Maruti holds a 67% share in the small car market due to these small cars.
Mahindra rests on Ford’s range?
Ford definitely left the Indian market, but how companies like Mahindra of the same range still survive in the Indian market. Many questions are being raised on this also. The answer is very simple, in fact Mahindra does not work in the small car segment. Mahindra continues to dominate the multi utility vehicle and SUV segment. The range of its models in this is also very long. Along with this, it has also launched models like KUV and TUB in the market to compete with other companies in the mid range whose price is between 6 to 10 lakhs.
Maruti’s market is the largest in India
Maruti has a strong hold in the Indian car market. There will hardly be any other automobile company in small cars, where Maruti’s rule is 67%, while talking about the segment of compact cars, Maruti has a hold of 64 percent in that too. However, it is definitely that the stake of Maruti has decreased compared to 2018. In 2018, where Maruti used to have 26 per cent share in the SUV segment. It has now come down to only 14 percent.
2 important reasons to leave Ford
Due to the departure of the car company Ford India from India, about 4000 employees of the company working in it will be affected. Although the company has stopped making cars only in India, its engine parts will still be made. There are two main reasons behind Ford’s departure – first, the slowdown in the car market in India due to Corona and secondly the end of its contract with Mahindra. In fact, in the last 10 years, Ford had invested a lot in India, but despite this, it has suffered a loss of more than 2 billion. In the year 2021, Ford’s market share was reduced to 2 percent, due to which the company was able to use only 20 percent of its installed capacity, due to the epidemic, there was a decline of 55 percent in exports.
What do car buyers say
One of the arguments made by Ford about closing its business in India was that the car market in India is on a slack, but if we look at the figures, they tell a different story. The three big companies, including Maruti Suzuki, Hyundai Motors and Tata Motors, which account for 80 per cent of the car market in India, claim that a large number of new buyers are coming into the market. If we look at the buyers of Maruti Suzuki, it has increased to 47 percent in the financial year 2020-21, which was 43 percent in the financial year 2019-20. There has also been an increase in the buyers of Hyundai Motor India. In 2019, where its sales were 32 percent. At the same time, this year it has gone up to 40 percent.
There is a lot of growth potential in the passenger car market right now
RC Bhargava, chairman of Maruti Suzuki India, believes that there is a huge potential for growth in the passenger car market in India right now. Actually RC Bhargava says that if the automobile industry has to give impetus to the economy and manufacturing sector, then the number of cars in the country should be 200 per 1000 people. Which is currently 25 to 30. For this, millions of cars need to be made every year.
Recently, RC Bhargava, while addressing the 61st conference of the automobile industry organization Society of Indian Automobile Manufacturers, said that even though the government talks big about supporting the auto industry, but when it comes to taking the right steps. If it is, then nothing like this is visible on the ground. He said that the auto mobile industry has been declining for a long time, so there is a need to pay attention to it.
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