Industryweek 5166 Ford India

Ford Ramps Up Efforts to Make India Export Hub

Sept. 4, 2013
Even with a sharp car market downturn in India, Dave Schoch, president of Ford Asia Pacific, said the company is looking at the subcontinent as a "long-term investment."

NEW DELHI -- Ford said today it is accelerating its drive to make India its global export hub amid strong demand in Asia and Africa for small cars and sports utility vehicles.

Ford (IW 500/8), which in earlier years was outmaneuvered in Asia by rivals with smaller, cheaper vehicles, is revamping its strategy with a shift to smaller cars and SUVs.

Even with a sharp car market downturn in India, Dave Schoch, president of Ford Asia Pacific, said on the sidelines of an auto conference in New Delhi that the company is looking at the subcontinent as a "long-term investment."

"Despite current macroeconomic factors and ongoing market challenges, India is a big part of our global strategy," Schoch said.

Ford is carrying out its biggest industrial revamp in half a century, building plants in India, China and Thailand, as it leverages a lower cost base and skilled manpower to boost output and meet demand in what it sees as an increasingly vital part of the world.

By 2020, Ford expects that demand for small vehicles will account for 60% of the market globally and Asia and Africa will represent half of the global volume.

Ford said it aims to be able to export from India to more than 50 markets globally within the next five years, up from 37 now.

"We're significantly increasing our Asia-Pacific production capacity to meet the growing demand in this part of the world," Schoch said.

India 'Hubbing' All the Rage

Ford is one of a number of companies using India as an export base.

South Korea's Hyundai is the biggest exporter of cars from India. Others include Nissan, which in July resurrected its iconic budget Datsun line to woo a new generation of cost-conscious buyers in emerging markets.

Franco-Japanese auto alliance Renault-Nissan are planning to double investments in India to $5 billion over the next five years as it seeks to grab market share.

Ford projects sales of 120 million units globally by 2020, up from 82 million now.

"Exports from India will help us to stay on track for growth in the region," Schoch said.

India's car sales contracted last year for the first time in a decade as an economic slump and high fuel prices and interest rates kept buyers out of showrooms.

India's market downturn is in sharp contrast to the previous decade when car sales grew as much as 30% -- prompting foreign giants from Ford to Volkswagen to make a beeline for India as they sought to boost sales globally.

But even with the slowdown, Ford India's sales grew by 7% last month to 11,065 vehicles, helped by the success of its compact SUV EcoSport.

Ford's plant in the city of Chennai in southern India can produce as many as 200,000 vehicles and 340,000 engines a year.

Ford is also building a $1 billion plant in the newly emerging auto hub of Sanand, in western Gujarat state, which will have capacity for 240,000 vehicles and 270,000 engines annually when it opens in 2014.

Copyright Agence France-Presse, 2013

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