Small is big in Ford’s India drive
CHENGALPATTU FORD Motor Co will focus on small, low-cost cars in India to make the country a manufacturing hub for Africa and the Asia-Pacific region, the head of its Indian operations said, as it races to catch up with global rivals in the fastgrowing market.
Ford will launch a slew of new small cars in India over the next three years to target a market it has neglected and ramp up exports to other emerging economies as it doubles capacity in Asia’s third-largest economy, where the small car is king.
“We haven’t been a major player (in India) because we weren’t positioning ourselves in the segment where 70 percent of all cars are sold,” Michael Boneham, president of Ford India told Reuters.
“We were focused more on issues outside of India and sending cars that were forcefeeding the Indian consumer.
“That was a mistake and we’ve learned from that mistake and now have a very robust plan for the business.
You can expect a heavy focus on small cars from Ford.” Ford India began operations in 1995. A year later, South Korea’s Hyundai Motor entered the market and immediately began targeting the small car sector where formerly state-run Maruti Suzuki had a virtual monopoly.
As Ford struggled with sluggish sales of oversized, costly vehicles, Hyundai’s compact cars drove the company to second place in the market within two years.
Hyundai India sold 616,000 cars in 2011, around five times Ford’s total.
Cheap, small models dominate India’s car market, accounting for around 70 percent of sales as aspirational middle class families, mainly relying on loans, trade in their motorcycles for four-wheeled status symbols.
Many global automakers have moved low-cost export operations to India recently.
Japan’s Nissan Motor (7201.T), which entered the country in 2005, exported 60,000 Micra sub-compacts last fiscal year, 80 percent of the vehicles’ production.
“India will be the small-car hub for Asia Pacific and Africa for Ford,” Boneham told Reuters in an interview at his company’s sprawling 350-acre factory in Chengalpattu, a one-hour drive south of Chennai. “This is a pretty robust test track...Many developing countries fit the profile of what we experience here.” As workers fit rear seats to a silver Ikon sedan, a model sold in South Africa but not India, dozens of Figo hatchbacks wait at the end of the factory’s production line. Almost half are left-hand drive — Indian drivers sit on the right — and will travel Indian roads only on the back of a truck.
Ford exported 30,000 cars from India in 2011, a fifth of its total production, and will ramp up shipments to North Africa in particular this year to increase to 50 the number of markets selling Indianmanufactured Figos, Ikons and Fusions.
Ford’s new EcoSport compact SUV will be built at the Chengalpattu plant with production for the local market and exports to begin after the company completes $142 million of factory enhancements. Ford will also make EcoSports in Brazil.