Ford targets India for assembly growth

Ford Motor plans to use expanded capacity in India to launch eight new models over the next five years and export its locally assembled small Figo car to about 50 countries.

The Detroit carmaker’s strategy for its Indian operations were detailed in remarks prepared for delivery at a conference in New Delhi on Thursday by Joe Hinrichs, head of Ford’s Asia-Pacific and Africa operations.
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Mr Hinrichs said the new models would be built with chassis used for similar models – under the company’s “One Ford” strategy, which has become an increasingly important part of its drive to integrate worldwide operations.

The Figo is one of several small models – also including Volkswagen’s Polo and the Nissan Micra – that have sharply boosted car sales in India this year. Domestic sales reached a new record in July, up 38 per cent from a year earlier.

Some carmakers see India as a more promising market than China in the next few years, with an estimated 10m-11m Indians expect to shift from two-wheeled forms of transport to small cars. By contrast, sales in China rose at their slowest pace in 15 months in July.

Ford unveiled a $500m plan last September to double capacity of its assembly plant in Chennai and to build a new engine plant. It has also set up new dealerships to make up ground lost earlier to its domestic and foreign rivals.

Toyota, Honda and Volkswagen are among other carmakers that are increasingly focusing on India as a small-car manufacturing hub. The new investments have coincided with a recovery in India’s economy and a revival of credit, with banks and finance companies now more willing to provide auto loans.

Ford India began exporting the Figo to South Africa in May. Mr Hinrichs said future markets will include Mexico, North African countries and the United Arab Emirates.

He estimated that Ford’s sales in the Asia-Pacific region and Africa would make up two-thirds of its worldwide growth over the next decade.

General Motors, Ford’s bigger Detroit rival, already sells more vehicles in China than in the US. It said that it plans to concentrate on China and Brazil.

Japanese carmakers are expanding production in India and other overseas markets partly to reduce their dependence on exports from Japan, whose profitability has been dented by the surging yen. Toyota announced a five-year plan last month to build factories in China, India, Brazil and the US.