Ford announces plans to expand India's Detroit

The Ford logo is displayed on the grill of a new Ford truck November 2, 2009 in Richmond, California. Ford Motor rerported a nearly $1 billion third quarter profit earning $997 million or 29 cents a share compared to a loss of $161 million, or 7 cents a share one year ago.

Stacy Vanek Smith: Today Ford announced it's opening a new car factory in western India. But it's not going to be pumping out Ford F-150s and Explorers.

The BBC's Rajini Vaidyanathan has more from India.

Rajini Vaidyanathan: The city of Chennai, in the southern part of the country, is called the Detroit of India because of the number of car companies setting up there. Most of the 10,000 Ford employees in India work in Chennai, building four models for this unique market -- cars here are typically smaller than in the U.S.

But by 2015, Ford says it wants to sell eight different models across the country.

The new Ford factory will be in the western state of Gujerat -- a place known for it's business friendly policies. This is all part of Ford's aggressive strategy to tap into the two fastest growing car markets in the world.

Tom Chekalackal works for Ford.

Tom Chekalackal: In Ford, India and China are seen as very critical markets - small cars are part of Ford's future. And being in this market and getting into that segment is very critical to Ford's plan globally.

With disposable incomes rising, more people in India are now able to afford cars -- providing more opportunity, and competition for both foreign and domestic manufacturers.

The small car market in India is crucial to Ford. Its Figo, is one model aimed at the domestic consumer -- as is the Indian made Tata Nano -- the world's cheapest car, which is also produced in Gujerat.

In Mumbai, I'm the BBC's Rajini Vaidyanathan for Marketplace.

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