Ford's focus falls on India as export hub

The move will include supplying vehicles to recession-hit Europe, and Ford expects as much as 40 per cent of its global sales to come from the Asian-Pacific region within five years, its chief executive has said.

The carmaker now exports its Figo subcompact hatchback to 38 countries from a factory in the Indian port city of Chennai. The plant has the capacity to produce 200,000 vehicles and 340,000 engines a year.

“We are going to be continuing to export more and more vehicles from India because India is so competitive and the vehicles here are so representative of the vehicles that people want around the world,” chief executive Alan Mulally said.

The announcement comes as Ford gears up to introduce its EcoSport compact sport-utility vehicle in India this month. India is among three countries -- including Brazil and China -- where the EcoSport is being manufactured with petrol and diesel engines. The vehicle will also be produced in Thailand and Russia.

Mr Mulally's view of India's potential echoes other global carmakers now treating India as a market to sell cars and a production centre. France's Renault said it would produce a small car in India from 2015 to use the country's low-cost manufacturing capabilities.

Nissan is bringing its Datsun brand to India, adding to Indonesia and Russia -- the other two production centres. Hyundai and Suzuki are among the largest exporters of cars from India. Mr Mulally has made expanding Ford's position in Asia a priority since he joined the company in 2006.

In April, he said he devoted about a third of his work week to issues in the region, up from 10 per cent when he started. In China, Ford is spending $US5 billion ($5.2bn) to open four new plants with a joint-venture partner over the next few years. Ford's sales in India fell 17 per cent in the fiscal year to March 31 to 77,225 vehicles.

But its vehicle exports from India grew 15 per cent to 29,316 vehicles in the last financial year, according to industry data. Ford was the seventh-largest passenger-vehicle maker in India in the last financial year, trailing Maruti Suzuki, a unit of Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra, Toyota and General Motors, in sales.

Ford's Indian unit produces the Classic and Fiesta midsize cars and Endeavour sport-utility vehicle in addition to the Figo, a 385,000 rupees ($6945) hatchback. The company is betting that the EcoSport will turn around its fortunes in India amid growing demand for SUVs on the Subcontinent.

Passenger-car sales in Asia's third-largest economy last year fell 6.7 per cent to 1.9 million units, the first automotive sales decline in a decade. But SUV sales surged 52 per cent to 553,660 units. In anticipation of growth in local sales and exports, Ford next year will open a $US1bn facility in Sanand, in the Indian state of Gujarat. That plant will produce up to 240,000 vehicles and 270,000 engines a year.

Gujarat, which lies on the country's western coast, has a vast coastline, making it suitable for Ford to export cars from the region, adding to the Chennai operations. Mr Mulally said India and China would be pivotal to Ford's strategy for attaining sustained growth in vehicle sales and profit. Ford sold 282,000 vehicles in the Asia-Pacific region in the first quarter of the year, a little less than a fifth of its global volume.