Why Ford Reduced The Price Of The Classic In India

In late January, Ford India announced a reduction in the price of its Classic Sedan from $1,130 to $1,600 USD. The move wasn’t much of a surprise to Indian auto industry observers and analysts, since the Classic — a slightly updated version of the original Ford Fiesta with the trunk of a sedan — accounted for a mere 5,900 sales in 2013 — a 61 percent drop compared to the 15,250 units sold in 2012. Making matters worse is the fact that the Figo — the five-door hatchback variant of the Classic — also saw its sales slide 44 percent to about 38,500 units in 2013. Having discussed the matter with several analysts, it would seem that Ford reduced the price of its most entry-level vehicle in India for two reasons:

  1. To increase the sales volume of the Classic by making it more attractive to car shoppers, and
  2. To allow the updated (global) 2014 Fiesta to occupy an ever lower price segment than it does today

The Blue Oval confirmed the first reason in a news release, with Ford India’s Vinay Piparsania stating that the “repositioning will make the Ford Classic an even more compelling offering for customers across India looking to move up to a great sedan.”

In fact, the price drop makes the Classic much cheaper than its direct rivals — the Toyota Etios and Tata Manza, and having a similar price as the Chevrolet Sail. Additionally, Ford’s offering is now priced in the same range as other entry-level vehicles sold in the country, including the Honda Amaze, Maruti Suzuki Dzire CS, and Tata Indigo CS.

The Classic’s price drop could also mean that the facelifted Fiesta, which is set to launch in India later this year, could also get repositioned further downmarket to better compete with such subcompact rivals as the Honda City (the sedan variant of the Honda Fit/Jazz), Hyundai Verna (aka Hyundai Accent), and Volkswagen Vento (the sedan variant of the Polo).

The Motrolix Take

Reducing the price of a vehicle (or most any mainstream product) is a surefire way to increase attention, consideration, and — ultimately — sales. In that regard, Ford’s strategy as it relates to the Classic is good. Subsequently, we have to wonder whether Ford will also reduce the price of the Figo and Fiesta in India, given that the EcoBoost is The Blue Oval’s only vehicle enjoying strong demand. Unfortunately, that demand is also causing long wait times and price hikes by dealers.

If we were Ford, we would introduce other global offerings — including the Focus, Fusion, Escape/Kuga, and global Edge — available in the country. So here’s to hoping that the price drop for the Classic is just the tip of the iceberg for a new market strategy for Ford India.

News editor focusing on business, financial, and sales coverage who loves anything on wheels, especially if it's fast.

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