Ford's New India Plants Will See Surge in Small, Low-Cost Cars
Automaker is betting on Asian markets to boost global sales by 45 percent by 2015.
Ford said it would invest $1 billion to expand engine production and build two new manufacturing plants in India, one of the world’s fastest-growing car markets and one that the automaker says is critical for boosting its annual global sales to at least 8 million cars by 2015.
The new facilities will increase Ford’s Indian manufacturing -- in place since the mid-1990s -- by 240,000 cars and 270,000 engines per year when finished in 2014. Ford plans to introduce eight new models for the Indian and other Asian markets by 2015, some of which will be exported to Brazil, China, Russia and possibly Europe, the company told MSN Autos. In February, Ford opened its fourth plant in China, where it plans to introduce 15 new models in the same time frame.
The Blue Oval, which sold 5.5 million cars worldwide last year, has a much smaller share of the Asian market than General Motors. In 2011, Ford sold only about 100,000 cars in India, compared with about 500,000 in China and more than 2 million in the U.S. Still, Ford says it expects the growing Asian market to account for 60 to 70 percent of its overall sales growth.
Ford’s strategy is to focus strictly on small cars, no bigger than the Fiesta, that will offer low ownership costs and high durability, the company said. One of the cars, the Fiesta-based EcoSport crossover, pictured above, debuted at the New Delhi Auto Show in January and will be sold alongside the current Fiesta and the Figo, an Indian-only subcompact. Currently, Ford sells only four models in India, but it says the new models would not compete on price alone.
“Ultimately we hope to be selling excellent value, not just a price point,” Ford spokesman Mark Schirmer said.
While the U.S. is unlikely to ever see these cars, Ford said it is already prepping its smallest production engine, a 1.0-liter turbocharged 3-cylinder, for use in a future U.S. model.
While Indian car sales have slowed significantly -- through this month, industry sales increased just 0.3 percent, compared with 29.5 percent in 2011 -- Ford says it expects the market to improve. “We recognize long-term, over the next decade or so, that India and China, while they might slow down from the blazing pace they were at, are still growth markets,” Schirmer said.
The announcement nips at the heels of Nissan CEO Carlos Ghosn, who on Tuesday confirmed plans to increase production in Indonesia and introduce Datsun as a low-cost brand in 2014 for India, Indonesia and Russia.
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