Frederiek Toney is a 14-year veteran of the Ford Motor Company. He is currently president, Global Ford Customer Service – a role that’s brought him to India many times over the years. On his most recent visit, we sat down with him to discuss a brand new program to appoint parts distributors across the country..
Tell us a little bit about the program?
We’ve been working on this for a couple of years, and its culminating at just the right time for a lot of reasons – but we can’t do it quickly enough actually. For one thing, we’re always looking to make sure the consumer can have a great experience, and we’ve been looking at our cost of ownership and the perception of our customers in India. We’ve been studying this for about three years, and frankly it’s time for us to debunk the myth that our parts are not accessible and competitively priced. The only way we can do that is to meet the issue head-on. And there are certain elements that we need to change in the way we do business – one of which is appointing distributors, working with them, and selling parts to our owners through these mediums. So, we’re really excited to identify distributors, figure out how much coverage we should allow them to have, and how we can do this in a way that respects the relationship we enjoy with our dealers. As we like to say at Ford, it has to be profitable for all.
Do your dealers feel that this would be profitable for them in the long term?
I think so. India is a market where we get to apply all that we’ve learned over the years. Over time, as vehicles age, we lose the customer at a higher percentage than we’d like. And one reason that happens is because of perception. In some cases, we need to do a better job of making sure that we offer competitive parts, and this program is in recognition of that. India is a relatively new market, and it’s developing, so we get to apply the learnings from the US and Europe – where we have a whole network of distributors who work side-by-side with our dealers in making our parts accessible to customers. In a place like India, we get to benefit from some of the trial-and-error that we’ve had in the US or Europe. So we’re really pleased to be opening up the market and making sure parts are accessible, and we’re looking forward to providing pretty comprehensive coverage all over the country to make that happen. And this is not dissimilar to what we have in the US – it’s just that we’re at different points in the maturity of the market.
From a development point of view, which market would be closest to India?
I would say, in many respects, India is similar to China. We have similar needs to open up the market in China, and make sure our parts our accessible. We’re growing so fast in both markets that we have to make sure that the experience factors, the infrastructure to support the products and the customers, are in place.
What kind of parts portfolio would a distributor stock, and what about the warranty on those parts?
We would make all the parts that we have in our parts portfolio available to our distributors. The whole idea is to make it available to the customer – make it accessible for them. And the warranty will remain the same. If we sell it as an original equipment part, the warranty will be the same.
Over the course of implementing this program in India, what timeline would you envision for parts prices to actually start coming down?
It’s not so much about the pricing. I think if you were to look today, you would find that we are fairly competitive. But what we’ll see is that, over time, as we have more scale in the marketplace, we’ll be able to have a better acquisition opportunity that will then translate to more competitiveness in the marketplace. And it’s really about getting to a value – consumers care about the price of parts, and they want a genuine Ford part applied to a genuine Ford. And what’s key for us is to make sure that this is the reality throughout the ownership experience – meaning from year 1 to year 15. It’s not just about selling a vehicle, or selling parts and the service, it’s about making sure that you can provide a convenient experience where the consumer has confidence in the product, and he or she gets value from it. You do those things, they have a wonderful experience, and you retain them.