Ford, GM sales crash to record low

Mahindra Ford India Ltd — now renamed as Ford India Ltd as partner M&M sold out due to mounting losses — registered a 52 per cent decline in sales during 11 months of fiscal 1998-99 with sales of only 2,865 units as compared to 6,032 units sold in the corresponding period last year. "Ford’s strategy on the Indian market was wrong since the day one. The company tried to capitalise only on its brand name which was not correct for a price conscious Indian customer," auto analysts said.

"Ultimately, customers look for value for money and notbrand names. The company is selling its Escort model for as high as Rs 8.06 lakh while the fuel-saving Honda `City’ is available for only Rs 5.56 lakh with over five options. Incidentally, the model launched by Ford has been already withdrawn from the US markets and now being dumped into the Indian market by the multinational,” said a US-returned businessman.

Similarly, auto giant General Motors registered a 57 per cent sales decline to 3,122 units in April-February of the current fiscal as compared to 7,285 vehicles sold in the same period last year, reveals statistics collected by the Association of Indian Automobile Manufacturers (AIAM).

"The US car makers failed to understand the intricacies of Indian market and jumped into the industry with wrong models with high price tags. Unless these companies introduce cheaper models, they will not be able to revive sales," say auto analysts. "With Toyota coming to Indian market next year with small car models both, Ford and GM will have to restructure theirIndian operations on an urgent basis," they add. "While these companies introduce new models at home every year — they were unable to give right product at right price. Premium segment cars cannot be sold in India where more than 80 per cent sales are in the small car segment," sources said.

On the other hand, the performance of Honda SIEL Cars India during the month of February was quite impressive as the company sold 604 units during the month as compared to 369 units sold the corresponding period last year.

But market leader Maruti Udyog also posted a 6.36 per cent decline in sales during 11 months of 1998-99 while sales of Premier Auto Ltd went out of track with a 75 per cent decline during the period. Another sufferer of the recessionary trend and growing competition is the now closed PAL-Peugeot Ltd as its sales declined by 91 per cent to only 434 vehicles during the review period as compared to 5,085 units sold in the same period last year.

Telco, which has high hopes from its new small carIndica also registered a 45 per cent decline in sales during the period to 2,408 units as compared to 4,382 vehicles sold last year. The delivery of Indica has been seriously marred as the company is facing difficulty in getting AC units for its cars. Despite the March 31st deadline, auto analysts say that Telco will not be able to provide Indica in time.

Overall, the car segment posted a four per cent decline in sales during April-February 1998-99 as all car manufacturers sold 360,246 vehicles as against 377,030 units sold in the same period last year. Maruti, which has a market share of over 80 per cent in the passenger car segment, could manage to sell 291,050 cars in 11 months of 1998-99 as against 310,843 units sold in the corresponding period last year.

Hindustan Motors, manufacturer of Lancer and Ambassador cars, posted a 13.6 per cent sales decline during the period as against 20,172 vehicles sold in April-February last year. The Korean auto maker Daewoo Motors (India), however, performed betteras compared to other leading auto companies and managed to sell 8962 units of their Matiz and Cielo cars in 11 months of this year as against 9,006 units sold in the same period last year.

Hyundai Motor India — which was a late entrant in the Indian car market — established itself by selling 13,358 units of its Santro car model during the review period.

The multi-utility vehicles segment witnessed a bad time during the review period with its sales declining by 20 per cent over the corresponding period last year. During April-February this year, 95,833 MUVs were sold as compared to 119,902 units sold in the same period last year. Commercial vehicles segment also did not perform well as sales declined by 16 per cent to 115,771 units in the review period this year as 138,018 units in the corresponding period last year.

The declining trend was also witnessed by three wheelers segment which recorded a 13 per cent decline in 11 months of the fiscal to 187,531 units as against 214,588 units sold in the sameperiod last year. The only segment which performed positively was the two-wheelers segment. The segment posted a 10 per cent sales increase during April-February 1998-99 to 3039857 units as compared to 2769099 units sold in the corresponding period last year.