Ford has had a rough run in India despite a handful of successful products over the years from the Ikon and Figo to the more recent EcoSport compact SUV. Yet, building market share in this extremely price-sensitive market is a tough challenge.
Additionally, one of the biggest obstacles was tackling the commonly held customer perception of cost of repairs being very high for Ford models compared to Japanese and Korean offerings. The company then realised that it was time to reengineer its cars, especially for the Indian market so that parts last longer coupled with generous service intervals and less expensive repairs.
“The work begins from product design to the purchase stage,” says N Prabhu, Vice President, Customer Services at Ford India. “We told engineers that the cost of ownership is a very important parameter for Indian customers.”
Till not so long ago, the company stuck to the tried-and-tested formula of servicing cars every six months. Today, things have changed with longer lasting parts and servicing scheduled once once a year.
“We tried to figure out how to avoid replacement of components and delay workshop visiting,” says Prabhu. “Increasing life of the parts means that they do not have to be constantly replaced. For instance, our cars do not need any coolant change for up to one lakh kilometres.”
Likewise, when it comes to costing of parts, there has been a complete change in approach. In the past, Ford recommended change of full assembly whenever there was a fault in a part. This meant that a problem with a component within the starter motor meant replacing the entire starter motor.
“We now have sub-assemblies and have been able to reduce the cost of ownership, adds Prabhu. “For example, the door has three main components and it is only the external sheet that gets damaged often. When that happens, we only need to change the outer sheet and not the entire door.”
Ford’s cost of repairs has reduced by over 50 per cent for parts that are frequently repaired. It is also working with dealerships and independent repair shops to ensure more complex sub-assemblies can be performed to slash repair costs even further.
“We have trained around 800 independent repair shops and 13 partners who buy parts from us,” says Prabhu. The company is also training independent mechanics in its 14 schools associated with ITIs. This is to ensure that the new workforce joining a dealership can take on the job rigours.
Localisation is, of course, all-important and Ford is pulling out all stops here to identify the right vendors. “In terms of component pricing, we are less expensive than the industry average. Figo Aspire, for instance is 11-20 per cent cheaper than competition, which is equally true for the Endeavour and its direct competitor,” he says.
Increasing service networksPrabhu said that those who shy away from a Ford product do so because they believe that it is high maintenance with exorbitant servicing costs thrown in. The upside is that the company’s customer retention record is one of the best in the industry. Going forward, the challenge is to increase the service network in Tier 2/3 regions. With 376 service outlets, it is now aggressively targeting smaller towns. “In 18-24 months, we are implementing ESS, or extended sales & service, which is a miniature dealership with basic maintenance, says Prabhu. “These will be 30 km from the main workshop and the target is to have 500 service centres in two years.”
With ESS, Ford can setup small service stations, which can cater to common problems and take the car to a larger service station if required. The ESS model requires a much lower investment outlay than a full-fledged service station, which makes the scale up quicker and easier.