New Delhi: With Ford Motor Co.’s turnaround on track, the company plans to get more aggressive in Asia. Last week it launched the Figo, a car designed for the Indian market, and priced it competitively at Rs3.49 lakh for an entry-level model. Alan Mulally, Ford’s chief executive officer, promises more launches for the Indian market and also speaks about the Toyota crisis and the regulation it could bring about. Edited excerpts:
For the first time in over 80 years Ford has overtaken General Motors in sales. That should be a huge psychological boost. How does it feel?
Well, it’s very exciting to see the reception that our customers have for the new Ford product line-up. We clearly chose to invest in the new cars and trucks that people really want and value, and to see that response in the marketplace and watch our market share climb—it’s very gratifying to see how much they like our new vehicles.
The increase in sales has also come about because a major competitor (Toyota) slipped. What are the lessons for your company in this?
We always need to remember that we’re in the business of providing safe and efficient transportation. That’s the most important thing we do. In Ford’s case if any company has an issue, we check our designs and all of our manufacturing around the world to make sure we don't have an issue. And if we do, we fix our manufacturing and designs to make sure we don’t have that issue. In the latest case all of our designs look very good so far.
The current crisis is also going to result in a lot of regulation. Are you concerned?
I hope not, because the process that we have in place between the regulators and the manufacturers has been very robust and has served us well. Each issue like this is a chance for us to look at the process and see if there are any recommended areas of improvement. So we’re participating in that process to review ourselves.
Tapping potential: Ford Motor’s chief executive officer Alan Mulally says B (midsize) and C (sedan) segments will dominate the Indian market. Pradeep Gaur/Mint
One point of concern that hasn’t gone away is that Ford has a lot more debt than its competitors. How much of a disadvantage will that prove to be in the future?
Yes, in the near term it will be a little bit of a disadvantage because we’re clearly paying more interest, but that was the plan as we all know—to have sufficient capital, invest in the new products and be in the market when the customers wanted them. And so as we get back to profitability—we were profitable in the third quarter and the fourth quarter (last year)—we’ll start accelerating the repayment of that debt and improving our balance sheet. (The)...longer-term advantages of us being able to have great cars and having stronger business results far outweigh the disadvantage.
Where do you expect car sales in the US to be at the end of 2010?
Our best estimate is that the market will recover and we anticipate (sales of) between 11.5 million and 12.5 million vehicles. That’s a relatively modest recovery compared with past recessions because clearly with the fragility of the economy and the unemployment, it just takes time to get going again.
We do have the flexibility now with our production system that if the market comes back faster, we’ll move up our production.
One of your new products that’s got great reviews is the Ford Focus. It’s in Europe, America and you’re also making it in America. Do you see this car as an indication of how Ford is moving from a large car and truck company to one that takes midsize cars very competitively?
Absolutely. The new Ford Focus that you’re mentioning is a real proof point about our new Ford. What we decided three years ago was that we’re going to have a complete family of vehicles for our customers around the world—small, medium and large cars, utilities and trucks, and every new vehicle will be best in class. The new Focus also represents the power of leveraging the Ford capability worldwide because the majority of the car will be identical even though it’s manufactured around the world and tailored to the unique tastes of consumers in each market.
You’ve said that you see 60% of worldwide sales coming from smaller cars. Is that still the way the market is moving given that the world economy is growing again?
It’s moving very much towards that—60% of vehicles worldwide being smaller size, about 25% being medium and 15% being large (vehicles). We’re very quickly transforming our Ford so that we could serve all those markets and segments.
With the Chinese market moving towards a midsize-car market and the Indian market moving towards a small-car market, what will be your strategy?
The key point about the Ford strategy was we decided three years ago that we’re going to have a complete family of vehicles to serve all the markets worldwide because we wanted to be a full service provider. That clearly gives us an advantage, plus we use our scale to satisfy the needs in the different countries around the world. And clearly that’s because we have a full family of best-in-class vehicles.
Given that your competitors have five-six-seven cars in the small-car segment, what can we see from Ford here?
I think if you look at the Ford product line you can see where we’re going. We’re so excited to launch the Figo right in the centre of the Indian market. You’ll see more variations of the Figo, more family members as we go forward.
Will Ford be launching more cars in the B?segment (midsize cars)?
The majority of the market in India as you pointed out will be in the B and C (sedans) size and we’ve got great products that we can bring to this market. We’re going to focus in every market around the world on the vehicles that our customers really want and the neat thing is with Ford we have a complete family of vehicles.
What about other brands from the Ford stable, such as the Mazda? Will we see them in India?
We decided three years ago that we’re going to focus on the Ford brand and so we’ve divested all the other brands that we had and so you’re going to see us have a laser focus on that Ford brand. That’s our main focus.