Ford Asia chief says small cars on way to China, India

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The head of Ford Motor Co operations in Asia said on Thursday that the company will meet its ambitious goals for growth in China and India by greatly expanding its product offerings. 

Over the next several years, Ford executive Joe Hinrichs said, the automaker will have more cars that are smaller than its subcompact Fiesta in China and India, which will mean less profit per vehicle. 

However, Hinrichs said Ford will make money by selling a high volume of these smaller cars. 

"For Ford, if you want to grow the business and be competitive in China, we have to have a product portfolio that plays where the volume is," Hinrichs said. 

Ford will have 15 product offerings in China by 2015, up from six today. Hinrichs said Ford needs to, and will, increase its offerings in the small-car segment of the auto market in China, which accounts for 70 percent of sales. 

Ford now has only one car, the Fiesta, that fits into this major portion of the Chinese market. Hinrichs declined to say how many of the 15 vehicles it will offer in China by 2015 will be in this high-volume small-car segment. 

"We will have a balanced portfolio," in China, he said. 

"It's all about scale. And it's all about having a cost base that's competitive in the market you are serving," said Hinrichs. 

For instance, Hinrichs said, about $1,000 was taken out of the cost of its successful India subcompact Figo while keeping its quality competitive. The Figo will eventually be sold in 50 countries, including the Gulf nations and in northern Africa, after its debut in India in 2010. 

Ford has market share of about 2.6 to 2.7 percent in both China and India. It lagged behind other competitors like cross-town rival General Motors Co (GM.N) in entering China. 

Hinrichs said one reason that Ford has to play catch-up now is that its troublesome financial situation prior to 2009 left it with insufficient cash to build factories and develop dealerships in the high-growth emerging nations. The Company expects the growth rate for auto sales in China and India to be about 13 percent from 2010 to 2020.


[Source:financialexpress.com]

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