Ford Motor Co, the only major US automaker to avoid bankruptcy, will sell its first small car in India next year, aiming to lure buyers in a country where hatchbacks account for about three out of every four cars sold.
Ford Chief Executive Officer Alan Mulally unveiled the Figo compact car in New Delhi yesterday. A factory in Chennai, southern India will make the car for both domestic and overseas markets, the company said in a statement.
Toyota Motor Corp and Volkswagen AG also plan to sell small cars in India, where Suzuki Motor Corp controls more than half the market with its seven compacts. Rising disposable incomes in the world's second-fastest growing major economy may more than double car sales to 3 million annually by 2015, in contrast to declining sales in the US, Japan and Europe.
"Anybody who wants volumes and better visibility for their brands will cater to the small-car market in India," said Surjit Singh Arora, an analyst at local brokerage Prabhudas Lilladher Pvt in Mumbai.
India's April-August car sales rose 13 percent from a year earlier to 559,656, helped by the introduction of Tata Motors Ltd's $2,500 Nano, the world's cheapest car. Ford's sales fell 2.5 percent in the period to 10,128, according to the Society of Indian Automobile Manufacturers.
Suzuki had 53 percent of the market, followed by Hyundai Motor Co with 21 percent and Tata with 12 percent. Ford is seventh among the 15 manufacturers in the country, according to Society's data.
"We are entering the sweet spot of the Indian market," Mulally told reporters. The Figo "is going to be a global platform, one of the key platforms for Ford."
About 60 percent of all vehicles sold worldwide in the next 20 years are going to be small-sized vehicles, Mulally said. The automaker has "no immediate plans" to compete with Tata's Nano, Mulally said.
Ford is positioning its Chennai factory as a "regional center of excellence for small-car engineering and production," the company said in a statement. The automaker also plans to export diesel and petrol engines to Asia Pacific and Africa from India.
Ford said last year it would spend $500 million in India as it seeks growth in emerging markets to compensate for a slump in sales at home. The company has expanded capacity at its factory to 200,000 vehicles a year. It now makes Ikon and Fiesta sedans, Fusion hatchbacks and the Endeavour sport-utility vehicles.
The automaker has spent 60 percent of its planned investment for India, Mulally said.
US prospects
The Ford CEO said the US market was looking good and vehicle sales were expected to increase.
"In the long term it's going to grow with the economy," Mullaly said.
He estimated that vehicle sales for the industry would be between 10.5 million to 11 million in 2009, about 12.5 million in 2010, and 14.5 million in 2011.
Source:China Daily
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