Ford To Increase Diesel Vehicles in India

Mumbai Jun 20, 2007; Reuters reported that Ford India, the wholly owned subsidiary, sold 41,797 units in the year to March 2007, an increase of 45 percent from the previous year, and aims to maintain its share of the market that is expected to nearly double to 2 million units by 2010.

"We may do better, but we stay conservative in our planning," said Scott McCormack, vice president of Ford India's marketing and sales, at the launch of a new variant of its Endeavour sport utility vehicle.

Ford has sold about 7,000 units of the Endeavour since its launch in 2003 and has 38 percent of the about 15,000 units a year market for premium SUVs, McCormack said.

Endeavour is built in Ford's plant near the southern city of Chennai with components imported from Thailand. Local parts make up about 30 percent of the vehicle's requirement, McCormack said.

Ford makes 60,000 vehicles a year at its Chennai plant and has said it is studying various "localisation opportunities" to cut costs to compete more aggressively in the price-sensitive market.

High fuel prices and new launches are encouraging a shift to diesel, with analysts forecasting diesel's share of the Indian passenger vehicle market at 35 percent by 2010 from 30 percent.

Endeavour is an all-diesel range and more than 75 percent of sales of the Ford Fiesta are also in diesel, McCormack said. The Fiesta makes up nearly 70 percent of Ford's sales in India

Ford will launch a diesel variant of its Fusion car in the third quarter of the year, and look at other options, he said.

"We are looking at new segments that are growing and that we can compete in with existing products or products that we can develop, like the Fiesta, for India," he said.

Ford saw slower sales in April and May because of firm interest rates and inflation, and had cut production, but expects sales to revive in June, said Managing Director Arvind Mathew.

"If this (softening) continues, we will have to revise projections for the year," he said, but did not specify a number.

Competition for Ford, which set up in India in 1995, is heating up: Suzuki Motor Corp.'s Maruti Udyog Ltd. has nearly half the market and launched a diesel model of its popular Swift hatchback earlier this year.

Number-two Hyundai Motor Co. is building a plant to make petrol and diesel engines, while General Motors has launched its mini Chevrolet Spark and said it may build an engine plant.

India's Mahindra & Mahindra and joint venture partner Renault in May launched the Logan sedan.

Additional reporting for Reuters by Rakesh Sharma in NEW DLEHI