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Ford To Cut Prices To Challenge Competitors
Ford's pricing policy has been criticized from different angles and finally the American carmaker has come to terms with its folly. The carmaker appeared to be highly confident with its pricing believing its high quality products would compensate for the higher price.
But this strategy cannot work in a price conscious country like India. People prefer to save a lakh or two rather than buying a car that offers more for a higher price. The same fate has been met by the Fiesta global sedan. Ford had launched its new global sedan, Fiesta early last year but the car has struggled to match up to expectations.
The Fiesta's price (Starting at Rs.8.25 Lakhs) is considered the primary reason for its low sales. Ford India has not even managed to sell one thousand Fiestas per month since its launch. While models such as the Volkswagen Vento, Hyundai Verna and Honda City (Starting at Rs.6.25 Lakhs) are performing exceedingly well. IN fact Ford's sales have dropped by 4% even as passenger vehicle sales increased by 9 %.
Ford finally appears to have realized its folly. It has announced that it will re look its pricing policy and we might soon expect a drastic rice cut is some Ford cars. The most notable one will be that of the Fiesta. Ford is offering a discount of Rs.75,000 since several months. This discount could be absorbed to in to the price of the car.
Nigel E Wark, executive director (marketing & sales), Ford India has said: "There is scope for reviewing our product prices as local market dynamics are changing so fast. While we continue to go strong on the Figo hatchback, prices of other products need to be rationalised in tune with new launches in the market and increased competition."
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