MUMBAI/CHENNAI, February 5: An overwhelming market preference for the luxury version of the diesel Escort has forced Mahindra Ford India Ltd (MFIL) to slam brakes on the production of its cheaper standard model, according to dealers. Most MFIL dealers believe that the standard model is now being phased out.However, although company officials conceded that volumes of the model have shrunk, they denied that production had stopped.
"Stocks of the diesel standard have almost been exhausted and only a few vehicles are left," more than one dealer told The Financial Express. Most dealers are in fact informing prospective customers that the standard diesel "will not be available in the future."
This is a virtual action replay of the phasing out of the standard version of the petrol model in mid-1997. The new 1600 cc petrol Escort, to be launched soon, will also come in only one version, it is learnt.
In a faxed reply, MFIL officials declined to comment specifically on the standard version, but said,"We are continuing with the production of the Ford Escort Diesel. The production mix changes accordingly to market requirements. At present, there is a preference for hi-series diesel."
"We also confirm that we have not reduced the price of our cars," the fax added. Both the standard and luxury versions of the diesel Escort run on the same 1800 cc engine. The differences between the two models are in other non-critical features like power windows and better dashboard.
In terms of pricing there is an "actual" difference of Rs 50,000 between the two versions. However cash discounts of about Rs 25,000 are offered with the standard version. Though there are no cash discounts on the luxury diesel Escort, accessories worth about Rs 10,000 are being offered free with every purchase by most dealers. "Most luxury car customers are keen on getting all the value-added features and don't mind the extra cost," dealers said. "The sales ratio between the two versions was 85:15 in favour of the luxury version," MahindraFord officials had said a few months ago.
Meanwhile growth in the luxury car segment is still sluggish. Mahindra Ford, it is learnt has sold about 275 Escorts last month. But retail sales were higher at about 400 cars. General Motors India also sold less than 300 vehicles last month. Maruti's Esteem continued its strong run and sold over 1,500 vehicles during January.
Industry sources expect a minor recovery in February and March, before the financial year comes to an end. "The recent one to two per cent hike in interest rates on car loans may not affect sales," most automobile manufacturers and car finance companies felt.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
