Ford plans 8 new models to drive sales in growing Indian market

Ford Motor Co. said it would introduce eight new vehicles in India by 2015 to capitalize on increasing demand in the fast-expanding car market.

A worker cleans up at a Ford production plant in Chennai, India, in February. Ford is expanding its offerings in the booming Indian market.
FORDINDIA
FORDINDIA

The Detroit auto maker also plans to export its recently introduced Figo small car from India to 50 new markets, including Mexico, North Africa and the Middle East, starting next year, company executives said Thursday.

Ford's renewed thrust into India is part of its strategy to deepen its presence in emerging markets such as China and Brazil to insulate itself from slower growth in the key markets of the U.S. and Europe.

Ford is among auto makers such as Volkswagen AG, Toyota Motor Corp. and Nissan Motor Co. that have either introduced small cars in India or plan to do so in the next few months.

Suzuki Motor Corp., which sells eight small models in India, dominates the nation's car market, where annual sales are forecast to climb to three million vehicles by 2016. Sales totaled 1.53 million in the fiscal year ended March 31.

"By the middle of this decade, we will introduce eight new vehicles to India from our global platforms, in segments appropriate for this market," Joe Hinrichs, president of Ford Asia Pacific and Africa, told the annual conference of the Society of Indian Automobile Manufacturers.

Mr. Hinrichs said industry sales in Asia Pacific and Africa will more than double to an estimated 35 million vehicles by 2018 from 16 million units in 2009. Those regions are expected to comprise nearly 70% of Ford's global growth during the next 10 years, he said.

In India, Ford has sold more than 30,000 of its Figo small car in the 25 weeks since its launch, Mr. Hinrichs said.

Ford introduced the Figo, its first small car in India, in March. The company, which began its India operations in 1995, also produces the midsize entry-level Ikon sedan, Fusion crossover, Fiesta sedan and Endeavour sport-utility vehicle in the port city of Chennai.

Local car and SUV sales of Ford vehicles soared more than three times during April-July 2010 to 31,597 vehicles. This included 25,332 units of the Figo and Fusion hatchbacks, with a majority of volumes coming from the latest model.

Ford can produce as many as 200,000 cars a year in Chennai. The facility also includes a plant with a combined capacity of 250,000 diesel and gasoline engines a year.

The company has been exporting the Figo to South Africa since May 2010. It also exports the Fiesta and diesel powertrains to South Africa, as well as gasoline engines to Thailand.

The development of the Figo and the export plans are part of Ford's nearly $500 million investment in India.

Mr. Hinrichs said vehicle sales in India have grown at an average annual rate of 17% over the past five years and as many as 10 million to 11 million people will likely migrate from scooters and motorcycles to small cars in the next few years.

He added that Ford's plan to introduce eight vehicles in five years will significantly affect its manufacturing operations, supply chain, dealerships and employees in India.

Separately Thursday, Tata Motors Ltd. said it is in talks with Ford to procure more engines to meet demand for its Jaguar-Land Rover luxury-car brands, based in the U.K.

"The demand for Jaguar-Land Rover vehicles has exceeded our projections," Carl-Peter Forster, chief executive and managing director of Tata Motors' global operations, told reporters at the Indian auto conference.

Mr. Forster also said the company is working toward raising as much as $1 billion to help pay down debt, though it hasn't decided on a time frame.

Mumbai-based Tata Motors, which acquired Jaguar and Land Rover from Ford for $2.3 billion in June 2008, has a long-term contract with Ford to supply engines.