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Ford Sees Exciting Times Ahead in India

March 22, 2014 | About:

Ford (NYSE:F) EcoSport has received a warm welcome from the targeted Indian audience. In fact the company is working hard to keep in pace with the high demand that’s leading to a huge backlog. The waiting time for the EcoSport is ranging between three to six months.

Boosting Production
Ford India President Nigel Harris said that the company is working with its suppliers to speed up production to clear the backlog of 60,000 units and reduce the waiting period. The main challenge lies in gathering the material. This is the prime factor that’s delaying the deliveries and adding to the waiting time.

Ford EcoSport. Source: Ford

So far the company has delivered nearly 40,000 units of the model. The compact sports utility vehicle (SUV) is a huge attract for several petrolheads as it comes at much lower prices compared to other SUVs. The EcoSport is available with an engine variant of 1.5 liters, and comes at an ex-showroom price of $10,000 to $15,800 depending on the features each version offers.

The Detroit giant has poured in $142 million in the Maraimalai Nagar facility where it manufactures the SUV. Other models that Ford produces and sells in India include Figo, Classic, Fiesta, and Endeavour.

A Positive Development
India is a price sensitive nation. At the interim budget that took place last month, Finance Minister P Chidambaram declared a cut in excise duty. This aided the American giant to reduce the prices of its vehicles by up to $1,700. The price cut varies for different model. Ford EcoSport buyers would get a concession of slightly over $400 as a result of the cut in excise duty.

The Current Trend
As of now, Harris says that the overall Indian market is a bit soft for the automobile sector. But that hasn’t deterred the company to revise its target of releasing eight models by 2015. Ford has high hopes from the emerging economy and plans to convert the country to an export hub. He said that India would become the third largest automobile market, behind the U.S. and China, with an appetite for seven million vehicles by the end of 2020.

The automaker is also building a second facility in Gujarat which is expected to be ready by this year end. Vehicles are scheduled to roll out from this unit from next year. Harris is quite optimistic and believes that the scenario would change after the Indian elections.

Economic indicators suggest that the Indian automobile market shall grow in a big way as the proportion of the middle class population is increasing in the country. This will automatically fuel the need of buying more cars, which is no more considered luxurious in this nation, obviously depending on the price of the car.

Last Thoughts
The U.S. auto major is confident about the growth in the Indian passenger car segment, and believes that it’s the right time to set up factories and co-ordinate with vendors to expand capacity. In the words of Harris, the company’s all set to work “hard to give value for money, which the Indian customers want”. The company is targeting the B-segment which it considers has huge growth potential. It would be interesting to see how Ford manages to make inroads in this emerging nation.

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