Ford Eyes Small Car for Indian Market

by : Anthony Fontanelle

The Ford Motor Company's Indian arm recently announced that they are indeed planning to introduce a small car in the growing Indian auto market. The automaker though also announced that they will not be manufacturing small cars with a price tag of $3,000 which is the goal of domestic and foreign automakers for the Indian auto market.

Today, about 80 percent of new vehicles sold in India are small cars. Most of them are sold by Maruti Udyog Ltd. and Tata Motors Ltd. Both of these domestic automakers have already started developing cheap small cars which will be introduced in the Indian auto market before the turn of the decade. The said vehicle which is already in the works will be priced at about half of the price of the currently cheapest car sold in India.

The announcement was made by Ford India Pvt. Ltd.'s Managing Director and President Mathews. "At the moment, I'm not looking at that ($3,000) kind of price. I'm looking at a small car but not at that price point," said the director during the launch of the diesel Ford Fusion in India recently.

"I look forward to seeing what the (Tata) vehicle looks like," he said. "I'm not being so categorical, I'm just curious as to what this car will look like." Aside from Tata Motors and Maruti Udyog, Ford's competitor in the steadily growing Indian auto market includes Honda and Volkswagen. Both of these automakers have recently expressed their interest in expanding their presence in the Indian auto market.

General Motors has already started marketing small cars in the country earlier this year. The alliance of Renault and Nissan are also growing in terms of production in India. The French and Japanese automakers not only aim to increase their production of vehicles in the country but also make India one of their major production bases.

Aside from developing small cars for the Indian auto market, Ford is also concentrating on the development of -equipped diesel cars - an example of which is the recently launched Fusion diesel. Indian car buyers are looking for fuel efficient cars and diesel vehicles is one of the solutions.

Since diesel is cheaper than gasoline, and with the price of petroleum fuel increasing steadily, it is, of course, a practical choice for auto buyers. This trend is not only manifested in the Indian auto market but also in Europe.

According to studies conducted on the Indian auto market, 30 percent of auto buyers in India prefer diesel powered cars than gasoline ones. New generation of diesel engines are now attracting more attention due to their cleaner emissions compared to previous generations of diesel engines. It is expected that by the year 2010, 35 percent of Indian auto buyers would prefer diesel cars over gasoline-powered ones.

More than 70 percent of Ford Fiestas sold by the automaker in India are powered by diesel engines. According to Mathew, that number comprises about 22 percent of the midsize car segment market in India. The introduction of the diesel Fusion is expected to boost the sale of diesel powered cars in the Indian auto market.