Quote:
Originally Posted by gemithomas The fact that ford is not confident enough to give the 4th year extended warranty makes me think now. Did i make a hasty decision by any chance???!!! ![Frustration](https://www.team-bhp.com/forum/images/smilies/Frustration.gif) |
Hey, We have been making the same TDCi engines in Chennai for a long time now, Even my Fusion has a 'Made in Chennai' TDCi engine. So here there is no question of any cost cutting. Rather the Figo TDCi engine costs more than my Fusion TDCi Engine because of the modifications done to the engine cover & manifold.
As far as the 4th year warranty is concerned, It is not being offered as:
You know that after the 3rd year, The maintenance costs to rise by a certain % in most cases. This % figure is usually anywhere between 0-20%.
Some of the costs incurred could mean :
1) A rusted muffler (only on cars that did nt get the underbody treatment done up)
2) Suspension trouble (on cars that travel more than 100 kms a day & on rough, badland roads(or are they known as no roads))
etc. etc.
Now these parts do cost a lot of money to the company & already we have kept our profits on the figo just above the per unit break even point.
So if you add some of the parts cost that the company has to borne because of the 4th year warranty, then we come down below our operating range. This then causes losses. Small losses per unit multiplied by 'x' lakh units results in bombastic (
![Big Grin](https://www.team-bhp.com/forum/images/smilies/biggrin.png)
) losses!
As a company, we would not like to go bankrupt now, do we.
PS - It is estimated that the Figo project will break even only when 100,000 units of the figo are sold <---- Not an official figure but this is what i heard.
Ford does operate on a very meager profit regime throughout the world, The focus is always on providing great quality at the most competitive price point.
In Europe, we are a VFM brand but not a low cost brand. But if we get the same cars in India, we would become a luxury brand here.
If our sales fall, at any point, like it did in the US a few years back, Then the pressure is on the company as according to our operating principle, we have to sell minimum 'X' units of cars (model wise) to get Y% of profit. If this is not the case then the company does make a loss.
Now back to the India situation, In India our dealers are given a higher margin then lets say in comparison to maruti, hyundai.
This is because earlier, our sales were low & dealers were finding it hard to survive.
This however has changed with the Figo, wherein our dealers are given even less margin then maruti, hyundai since the no. of cars they will be selling will be more. However they still enjoy a higher margin on cars like the fiesta & the Endy.