Ford Motor Company Sets Sights on Indian Auto Market

Eight new vehicles have been created by Ford Motor Company to be launched within five years in what is proving to be a fast-growing, newly emerging market: India. The automaker sees an opportunity in India, where people are moving from the traditional two and three-wheeled modes of transportation to small cars.

Joe Hinrichs, president of Ford Asia Pacific and Africa, spoke recently at an auto industry conference in New Delhi. He announced Ford’s intentions during a prepared speech, saying, “We have big plans for India and for this region. By the middle of this decade, we will introduce eight new vehicles to India from our global platforms.”

Ford predicts that around 70% of its global sales over the next ten years will come from sales in India and other markets in the Asia Pacific region and in Africa.  Ford was the only U.S. automaker to survive the plunging market without taxpayer bailout money, and has mainly focused on the North American market for the last few years. Now the company is ready to grow and expand into emerging markets where ailing auto giant GM has created a huge presence as part of its recovery plan.

The cost of the expansion so far is $500 million for larger production facilities in Chennai, India along with a new engine plant. The plant began building Figo minicars this year, and the Fiesta subcompact and Endeavor SUV is already being manufactured there. The two cars are also exported to South Africa.

Hinrichs reported during his speech that Ford sold over 30,000 Figos in India in 25 weeks. Surging sales have automakers from all over the world interested in the new market, where sales predictions for this year are 2.7 million light vehicles, which is up from 2 million last year.

Along with the new opportunities, however, come new challenges. Smaller vehicles mean smaller profits, and it’s difficult to make money where subcompacts are the hottest item.

The largest foreign automakers in India currently are Suzuki Group and Hyundai Motor Company with a combined market share of 51%. GM has 4% of the market, while Ford and Toyota have 3% each according to J.D. Power and Associates.

Ford says it will export some of the vehicles produced in India, but most will be sold locally.

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