Ford faces supply crises due to out stripped demand for diesel cars in India

Due to the petrol price hike, slowdown in the auto market and customer demands, auto makers are more inclined towards production of diesel-driven cars. Now, Ford India, the Indian subsidiary, though wholly owned by the auto giant Ford Motor company is facing a major supply crunch as it is unable to meet the demands of the customers for its diesel-driven cars.

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According to Michael Boneham, the MD of Ford India, they are likely to strike the balance between the supply and demand in the coming three months. The production of the Ford India’s diesel engine cars have suffered mainly due to supply limitations for powertrain related components appears to be the major concern for the company. The demand for the diesel cars has been increased from 55-60% to 70% during the fiscal year 2010-2011, which they hope to reach in three months’ time. Ford Fiesta Classic sedan that was launched on Thursday, 14th of this month in Mumbai is first among the eight vehicles that are to be launched by 2015. The Sedan is available in both petrol and diesel engine variants with 1.5 litre Ti-VCT and 1.5 litre duratoq TDCi specifications for the respective engines. The price of the Ford Fiesta Classic sedan ranges between Rs 8.31 lakhs to Rs 10.51 lakhs.

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The Sales of Ford India have been hindered due to the lack of supply of the diesel powered cars and hence taken a major dip by 6.79% to 21,305 units in the first quarter of this financial year and by 4.5% to 6,940 units in June this year. Boneham also informed that out of over 28,500 units of petrol and diesel powered cars that were produced in the quarter April – June this year, 70% are diesel-driven cars. Car exports have increased by 288% to 5, 384 units during the first quarter of 2011-2012 fiscal year. Ford India’s Ford Figo hatchback has been the major revenue generator of the domestic sales as well as the exports out of India. Ford India claims to have sold more than 1, 00,000 units of Ford Figo, since its launch in March this year.

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Ford India is currently concentrating on the launch of more hatchbacks similar to that of Ford Figo and expecting them to take the same route as that of Ford Figo. They have already invested around $72 million in setting up a manufacturing plant with annual production capacity of 3,30,000  units with more of  hatchback production due to their success in this segment and are likely to export to international markets like Thailand and South Africa as claimed by Boneham. Despite the slowdown in car market, Ford India's business seems to be as soaring as ever.

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