We did not misread EcoSport demand: Ford India President

It can be termed as an incredible success or, on the contrary, a failure to capitalise on demand. Ford EcoSport is clearly generating mixed feelings for Ford India management - happiness on account of the massive demand for the compact sport-utility vehicle and concern on the company's inability to meet that demand.

Bookings for the car, priced attractively at Rs 5.59 lakh onwards, opened in June last year and deliveries began early July. Such was the demand that bookings had to be stopped in September after touching 60,000 units. Six months later only 40,000 units of the car have been delivered to customers. The waiting period continues to be between three and six months depending on the variants on offer.

"We are not happy that it has taken us so long to ramp up production," says Nigel Harris, who took over as President at Ford India six weeks ago. The problem, he says, is on the material side. "We are working with suppliers, helping them to enhance their capacity," he adds.

The long waiting period is leading to a loss of customers despite Ford India's attempts to get them to buy other Ford models through significant discounts and other offers. "We have lost some customers. They were not willing to wait. But those who have chosen to wait and taken delivery of EcoSport are very happy," he says. He did not disclose the orders the company lost.

What went wrong? Did the extent of demand the car generated surprise the company?

It appears so. When the company launched the vehicle, it had created an inventory of just 5,000 units. But the bookings shot past 60,000 units. "We did not misread the market for Ford EcoSport," emphasises Harris. "Like all carmakers who were coming out of the global financial crisis, we were very conservative in our estimation."

What is complicating the problem for the company is that not all the EcoSports manufactured in India are sold locally. A third of the production is exported. "We have made commitments to various markets and we have to fulfil it," says Harris.

So when will the waiting period end? "By early next year," he says. With Maruti Suzuki and other manufacturers coming out with their compact SUVs, it is not clear how this equilibrium will be achieved - by ramping up supply to meet demand or demand declining to match the current supply.