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Ford driving up operations in India

Raymond Thibodeaux Aug 18, 2009
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Ford driving up operations in India

Raymond Thibodeaux Aug 18, 2009
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Steve Chiotakis: With sluggish sales at home, Ford Motor Company is ramping up its operations abroad, in fast-developing countries such as India. There, it’s still a small player, literally, with big ambitions. Raymond Thibodeaux reports from New Delhi.


Raymond Thibodeaux: This is Delhi ‘s biggest Ford dealership, but it isn’t exactly humming. On a weekday afternoon, just a few customers walk the lot. Jagdish Prakash is looking to trade in his Indian-brand Maruti and buy his first Ford.

JAGDISH PRAKASH: I’ve tried Maruti a number of times, now I want to change.

Prakash, a 53-year-old financial consultant, has reaped the benefits of India ‘s boom, so he can afford to trade up to a Ford Fiesta. He says part of Ford’s appeal is their cars’ reputation for toughness. Just like India ‘s ubiquitous “Ambassador,” which is officially a car but tough enough to be a tank.

RAKASH: Our roads are not as good compared to foreign roads. We like a sturdy car like the Ambassador. It was a very sturdy car, you can even hit a person and there won’t be any effect on the car, but the person will be destroyed.

That’s not the kind of toughness Ford will be pushing in its ads, but the automaker is keen to attract more customers like Prakash. India’s middle class has swollen to about 300 million, and American giants like Ford and GM don’t want to miss out on those potential customers. Michael Bonaham is managing director of Ford India.

MICHAEL BONAHAM: The Indian market is experiencing tremendous growth and we’re predicting that will continue certainly [for] the next ten years or so.

The automaker set up shop here about a decade ago. So far, it’s only captured about 3 percent of market. Bonaham says Ford is spending half a billion dollars, mainly to expand its India operations into a key segment for sales — small cars for about $8,000 or less.

BONAHAM: That’s 65 to 70 percent of the total vehicles sold in India. And really if you’re not in that segment you continue to be niche player.

Ford is expecting to roll out its first-ever car in that category early next year. Company bosses won’t say what they’re calling the new auto, but they’re confident it will catapult Ford into India’s major leagues.

In New Delhi, I’m Raymond Thibodeaux for Marketplace.

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