labels: automotive, ford motors, general motors india, passenger cars
GM and Ford set to carry the war into India news
Mohini Bhatnagar
09 February 2004

After battling it out on home turf for decades, traditional foes, General Motors Co. and Ford Motor Co. carried their quest for supremacy into the auto markets of the UK, Europe and other developed and rapidly developing countries. Now India looms large on their horizon. GM's global portfolio comprises models like Saab, Chevrolet, Pontiac and Hummer while Ford has its own formidable array of Mustang, Taurus, Escape and Explorer and others in the US and overseas.

In India, an emerging car market compared to the west, Ford has an impressive line up of another kind; three models and nearly ten variants of one models the - Ikon - with probably many more to come in the future. General Motors on the other hand is following its global strategy of introducing a number of models to cover most of the segments.

General Motors India (GMI) now has six models in the Indian market; the Opel Astra, Opel Corsa, Opel Corsa Sail, Opel Vectra, Chevrolet Forester and Chevrolet Optra and is said to be planning the launch of its seventh. This will be a re-launch in India of Daewoo's Matiz, but under a new name , 'Spark', in collaboration with Korea's Daewoo Automotive Technologies. The company will also introduce the multi-utility vehicle (MUV), Tavera based on the Isuzu Panther.
The latest offering from GMI's stables is the 1.6 litre variant of the Chevrolet Optra, priced at Rs 7.29 lakh and the 1.6LS for Rs 7.89 lakh, (ex-showroom, Delhi). The smaller engine variant of the Optra is positioned in the upper 'C' segment against Maruti Baleno, Honda City and Mitsubishi Lancer.

On the other hand, Ford unlike in the US, has had better success in India with its 'Josh machine' , the Ikon, than GMI has had with its Opel line up of Astra and Corsa. The reason has a lot to do with the drive of the Ikon, which develops a torque of 130 nm at 2500 rpm while the Corsa develops a torque of 126 nm at 3000 rpm, brake horse power at 91 - 92 of both being comparable.

Ford Ikon thus develops a higher torque at the start, which gives it a great pick up while the Corsa and Astra - even though equipped with comparable horse power and engine size - have a comparatively sluggish pick up are somewhat sluggish in comparison

The Indian buyer is known for his fondness for cars with a good pick up. This is evident from the blockbuster success of the Santro Zip Drive (positioned as a car with a fast pick up platform) and the new Honda City . Called the Fit in Japan, Honda City combines the lowest horse power in its category with 77 bhp with a torque of 12.8 kgm at 2700 rpm, again a quick build up of power aided by an excellent fuel economy of over 17 kms to a litre. Obviously, Honda has understood the Indian car buyer's mind.

On fuel economy, the Ikon, Opel Astra and Corsa are comparable as all of them offer about 10-11 kms to a litre. Consequently, it is on its superior 'pick-up', that the Ford Ikon won hands down over the GMI cars.

GMI's success has been mainly due to the Optra which has contributed to doubling the company's unit sales. The Optra is the Daewoo Nubira, built on the Korean strategy of offering good performance, low fuel consumption at the right price, a premise Hyundai Motor has so successfully used in the Indian market.

After the success of Optra in India, GMI has begun to bank more on Korean and Japanese car technology and to bring in models that are positioned on the value for money platform. The decision to relaunch the small car, Matiz (as Spark) is a case in point. Matiz launched by Daewoo in the mid '90s was an unfortunate case of a 'might have been' success except that the Korean company had got its engine size and price equation wrong. An 800 cc car priced above Rs 2.5 lakh was not what the Indian market was prepared for. With the Santro, a 1000 cc car available at the same price, Matiz didn't stand a chance.

As part of its strategy of value for money pricing GMI is launching the seven-seat capacity multi-utility vehicle, Chevrolet Tavera , based on the Isuzu Panther. The company has also tied up with Hindustan Motors for sourcing diesel engines to power the Tavera, which will not be available in a petrol variant. The vehicle is expected to be priced between Rs 6 lakh to Rs 8 lakh.

The company is also working on bringing in diesel engine options for the Opel Corsa and the Chevrolet Optra for which diesel engines are currently being tested, though a final decision is yet to be taken. GM has attempted to cater to the diesel car buyer in the past with its 1.9 litre turbo diesel on the Opel Astra. GM is also believed to be considering the launch of the Saab and Cadillac for the Indian market.

The company has spent between Rs 15 and 20 crore on brand building for the Chevrolet and has clearly stated that all cars launched under the Chevrolet brand would be targeted at the mainstream (read value for money) market.

Ford's strategy in India has been mainly to focus on its high selling Ikon model and introduce innumerable variants of the car. The portfolio of the Ikon ranges from the Ikon Flair (Rocam Petrol), Ikon Finesse (Rocam Petrol), Ikon Nxt 1.8D ZXi, Ikon Nxt 1.6ZXi, Ikon Nxt 1.3CLXi Ikon 1.3 CLXi (Manual Endura-E-Petrol) and Ikon 1.6 ZXi (Rocam Petrol).

The company has sourced Ikon Flair's engine and gear box from Hindustan Motors to increase its indigenisation and intends to do the same for Nxt and other Ikon variants. The other models Ford India offers are the Ford Mondeo and the sports utility vehicle (SUV), Ford Endeavour.

Ford sells, on an average, 20,000 units a year in India and exports an almost equal number. The Ford Endeavour is being bought into India for assembly in a semi knocked-down condition. Priced between Rs 13 lakh and Rs 15 lakh, it is the cheapest SUV in the domestic market, with the Chevrolet Forester priced between Rs15-Rs 17 lakh, being its closest competitor.
GMI sold a total of 15,500 car units in 2003 and is targeting to sell 32,000 units in 2004-2005. With the launch of the Spark and Tavera it will fill the small car and MUV segments, all of which should set alarm bells ringing for Ford India which has already lost its global number two position to Toyota Motor Company.

As if their traditional rivalry wasn't enough the two will also need to watch over their shoulders to make sure none of the other contenders - Hyundai Motor, Skoda Auto and Tata Motors, who have charmed the markets with their own models - do not steal a march over them..

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GM and Ford set to carry the war into India