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Better Scope for Growth in India, Than China: Ford President

There is more opportunity for Ford Motor to grow its market share in India than in China, as it faces less competition there than in the mainland, according to Joe Hinrichs, Asia Pacific and Africa President at the automaker.

Ford Motor Company President Alan Mulally, left, in India at the unveiling of the Ford Figo.
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Ford Motor Company President Alan Mulally, left, in India at the unveiling of the Ford Figo.

“There are so many brands in China, 90 by some counts. Because there are less competitors, we could do a little bit better from a market share standpoint in India,” Hinrichs told CNBC’s Christine Tan on "Managing Asia". Ford currently has an approximately 3 percent market share in India.

“Maruti Suzuki is the dominant player in India because it has 47 percent of the share. But we like where we're going, we have been growing our share (over) last couple of years. We have new capacity, new products coming and we're investing in India for the long-term,” he said.

Maruti Suzuki, a joint venture between India's Maruti and Japan's Suzuki entered the Indian market in 1981 and has specialized in small, fuel efficient cars.

Ford , which is looking to grow its presence in India’s small car market, is investing $1 billion on a car assembly and engine plant in the western Indian state of Gujarat. Smaller car models dominate the domestic auto market, due to their affordability, accounting for around 70 percent of sales, according to Reuters.

“To do well in India you have to commit to a lot of really small cars, and Ford was never historically strong in that area, but we are now, we have the scale to be able to do that,” he said.

The Figo, Ford’s first small car for India that was launched two years ago, is priced between $6,700 and $10,200. It accounted for over 75 percent of the company’s total sales in India for the fiscal year ended March 31, 2012

“When we launched the Figo, our sales nearly tripled in one year. It made a huge difference to our dealers and to our brand,” Hinrichs said.

“One of our leading competitors was asked at the Delhi auto show in January ‘Who are you most concerned about, who has had the most growth recently,’ and he said Ford in India,” Hinrichs said, adding that the carmaker has eight more products in the pipeline for the Indian market.

Besides expanding its product offering, Hinrichs says Ford is rapidly growing its distribution network, adding a dealer “every 10 days” in the country.