Ford to Introduce More Small Cars in India and China

Ford Motor Company’s head said that their company is meeting their ambitious growth objectives through their Indian and Chinese markets by expanding their product lineup in the two emerging economies. Following the recession in America, one of the Big Three auto companies in America saw its profits dwindling, however the recent entry into auto markets of the two emerging economies have seen a turn its fortunes.

Joe Hinrichs, Ford Executive, was quoted as saying that they currently have more cars in the Indian and Chinese market that are smaller than their new subcompact Fiesta sedan, which ultimately leads to less profit for every vehicle. He however added that they will make a profit by selling these small cars in high volumes.

He said that for them to be competitive and increase their business in China, their product portfolio should be able to attract high volume sales. Ford will be offering 15 different models by 2015 in China that will contribute to 70% of their sales. As of now, the company has just one model, the Fiesta, which fits this part of the auto market in China.

Hinrichs further said that they their portfolio for the Chinese auto market will be nicely balanced, and that this is all regarding scale. He said that it was also regarding having a competitive price base in the auto market.

According to him, they managed to reduce the cost of their subcompact Figo in India by a $1,000, without compromising the competitive quality of the car. Figo will ultimately be available in more than 50 countries, which includes northern Africa and Gulf nations, following its launch in India, back in 2010.

Ford currently has a market share of 2.6% to 2.7% in both India and China. One of the reasons for this is that the company is focusing on these markets after suffering a blow in the recession of 2009, according to Hinrichs, when it didn’t have enough funds to develop dealerships and build factories in the emerging high growth nations.

The company is now expecting their growth rate in terms of auto sales to rise to 13% by 2020 in both India and China. According to Hinrichs, they plan to almost triple their dealership network by 2016 to 340 dealer outlets in India, adding that in the US market, which has a third of the population compared to India’s, the company has around 3,000 dealers.

Meanwhile, the leading auto manufacturer is planning to double their dealerships in China to around 700 by 2016, adding about two dealerships every week or 100 in a year. Dealerships in China have a lot of opportunity as many cities with a population above 1mn do not have a Ford dealer.

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