One Ford? "All New" Figo Launches in India

Sales recently began in India for Ford’s “all new” Figo. The launch of the Figo, a five-door sedan/hatchback, was a supposed to be a big deal. It is Ford’s first car designed specifically for the Indian market, and it was introduced by Mullaly himself in India last September. It’s built in Ford’s refurbished Chennai plant, where production started up in early February after a $500 million investment. In addition to producing cars for the local market, where sales are booming and compact cars, the so-called Sub B segment, make up 70% of the sales volume, Ford intends for the Chennai plant to be a supply hub for their Asia, Pacific and Africa operations.

Since arriving in Dearborn with a mandate for change, Ford’s CEO Alan Mullaly has been the primary cheerleader for the automaker’s One Ford program. The 2011 Focus, introduced at the NAIAS in Detroit earlier this year, will be the essentially the same car across global markets. The automaker wants to avoid past errors like building a uniquely inferior version of the previous generation Focus for America. The goal is to reduce costs, and focus all of the company’s global resources behind a single product. When Ford reintroduces the subcompact Fiesta to the US, it also will be nearly the same car as the EU version, introduced a couple years ago.

It is interesting that while Ford is launching the truly all-new Fiesta for the US and European markets, One Ford takes a back seat to financial realities of selling cars in developing countries. While Ford says that the Figo “leverages Ford’s small-car platform architecture, sharing underlying technology with the Ford Fiesta,” in another press release the Dearborn automaker says, “Designed and engineered for the India and export, the new Figo is based on a proven global small car architecture.”

Proven global small car architecture? What this means is that developing countries still get leftovers and old technology. The “all-new” Figo, is really the last generation Fiesta with new sheet metal to conform to Ford’s current “kinetic” design language.

Though the Indian auto market is booming, with record sales in February, it’s still very price sensitive. The least expensive Figo will carry a sticker price of about $7,600 for the 1.2 liter gasoline powered version, rising to $11,660 fully equipped, with a 1.4 liter diesel motor. The new 2011 US spec Fiesta has an MSRP starting at $13,320. Do the math.

Car companies have used aging veterans for their secondary markets for a long time, as recent TTAC articles about Brazilian VW Beetles and Buses will demonstrate. The Jeep XJ Cherokee is still, I believe, in production in China as the XJ2500. The idea, I suppose, is that developing markets have less sophisticated and less demanding consumers. As the Tata Nano demonstrates, when someone is moving from a scooter to an actual car, you don’t necessarily need GPS and electric mirrors standard to sell him on the car.

Leveraging global resources and producing a uniform global product isn’t the only way to save costs. Making the same Fiesta for Europe and North America will cut costs, no doubt, but the investment in the tooling for the new Fiesta will not be recovered for a while. It may not be possible, at this time, to make a profit on the Gen VI car at competitive Indian prices. Meanwhile the tooling for the Gen V Fiesta has already been paid for.

Fortunately, Indians most likely won’t have to wait that long to have access to the latest Fiesta. Ford has said that it intends to announce new product for the Indian market every 12 to 18 months for the foreseeable future. This has led to speculation that Ford may follow the Figo with the new three door Fiesta hatchback. Those rumors, though, peg the price at just around 600,000 rupees, at today’s conversion rate, $13,162, within a couple hundred dollars of the US spec Fiesta’s MSRP. Like I said, do the math.