Ford Hopes New Figo Will Help It Win Asian Buyers

Heather Timmons|The New York Times

Ford Motor is increasing its focus on the fast-growing car markets of the Asia-Pacific region, executives said Wednesday as they rolled out a new small car in India.

The “Figo,” a four-door hatchback with expansive side windows and cat’s-eye headlights, was designed with the help of Indian engineers and will be built in India and shipped to nearby countries. Ford’s top executives introduced the car with techno music and fanfare at a five-star New Delhi hotel and said the car was emblematic of Ford’s new emphasis on the region.

“Asia-Pacific is a really important market for us,” Alan Mulally, chief executive of Ford , said after the Figo’s introduction. “We will accelerate our presence” in the region, he said, and India will play a large part in that push.

Ford Sign

The Figo will be available in India in 2010. Ford did not provide any details on the Figo’s likely price or fuel consumption or say which countries it would ship the car to from India.

Ford Motor soldiered through the global recession without seeking bankruptcy protection like its big American peers. But the company still suffered as car sales dropped in North America and Europe, losing $1.4 billion in the first quarter of 2009. To date, Ford trails General Motors and Toyota in China and has a tiny presence in India.

The Figo represents the first product of Ford’s $500 million investment to transform its manufacturing plant in Chennai, formerly Madras, in southeast India. Ford has doubled the Chennai plant’s production capacity to 200,000 vehicles a year and will be able to make 250,000 diesel engines a year by 2010, executives said Wednesday.

India is “going to be a key design and manufacturing hub” for Ford, Mr. Mulally said. Foreign car manufacturers are turning to India’s combination of engineering expertise and emphasis on value and fuel efficiency to design hyper-efficient cheap cars. “Literally, India is designing the small car for the world,” he said.

Later this week, Mr. Mulally will travel to China, where he is expected to announce a new production plant. Xinhua, China’s state-run news agency, said the plant, with annual capacity of 300,000 cars, would be located in Chongqing, in southern China, and would produce high-end sedans and sport utility vehicles.

“India and China are going to be the game-changers in the next decade, so it is natural for the major manufacturers to focus on them,” said Neeraj Bandhu, director for India at CSM Worldwide, an automotive consulting firm.

India and China will lead the world’s car-buying recovery, CSM Worldwide predicts. Car sales in India will be 45 percent higher in 2011 than they were in 2007, the firm said, followed by 39 percent growth in China and 26 percent growth in Brazil. In contrast, car sales in North America and Europe will not have returned to their 2007 levels by 2011.

Like Renault-Nissan and Toyota, Ford is integrating its global operations to achieve economies of scale and relocating manufacturing and research to low-cost areas like India. CSM Worldwide predicts that Ford’s production in its home market of North America will decline to 35 percent of global production by 2015 from 54 percent in 1997.

Last year, General Motors introduced a small car called the Spark in India, and it plans to bring out a mini-car later this year, developed with the help of local engineers. Volkswagen and Toyota are also planning to sell small cars in India.

Ford’s approach to the Indian market suggests that the company is still a newcomer here, analysts say. For example, Figo is Italian for “cool” but does not mean anything in Hindi, the most widely spoken official language of India. While it was developing the Figo, the automaker created a fictitious target customer in India: Sandeep, a man in his mid-20s. While the name is a common first name in India, the concept suggested the Indian market was a mystery to Ford executives, the analysts said.

Maruti Suzuki, Hyundai and Tata Motors dominate the Indian car market, while Ford is the seventh-largest manufacturer here, according to the Society of Indian Automobile Manufacturers. U.S. automakers have struggled in India because they came to the market with midsize cars, analysts said.

Ford’s new approach wins praise. In the past, “they did not target the mass market, or refresh their product,” said Mr. Bandhu. But, he said, “there is a lot of interest” in hatchbacks like the Figo.