Ford Takes a Truck-Sized Gamble In India

The Ford Motor Co. (NYSE:F) is taking a big bet with the new EcoSport SUV, slated for its debut in India in June. The new model is Ford’s hope at slowing declining sales in the region, which have fallen 17 percent over the last fiscal year. While overall auto sales have sloped downward, SUV trends have spiked — up 52 percent over the year prior, amid passenger car declines of 6.7 percent.

Ford is intending to capitalize on this new trend with the EcoSport, which will be available with three engine options; two are gasoline, while the third is a diesel, an immensely popular trim in the country. One of the gasoline engines Ford is offering is the EcoBoost engine, a 1-litre turbo charged three-cylinder which puts out 125 horsepower, enough to compete with the more prevalent 1.6-liter gasoline engine in Indian SUVs, according to the company, which claims that the engine design also gives the EcoBoost engine impressive fuel efficiency, getting 18.9 kilometers to a liter, or 44.5 miles to a gallon.

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Other models, such as Renault S.A‘s Duster and Mahindra & Mahindra’s Quanto and XUV500 have been enormously popular, and Ford is hoping it can get a foothold in the market with its new offering, and snag some market share. The cars will be built outside of Chennai for both domestic use and exporting.

“We will export the EcoSport to both right-hand and left-hand drive markets,” said Joginder Singh, president and managing director of Ford India. The company exported 29,316 vehicles from India in the last financial year, an increase of 15 percent.

However, the EcoSport is only the start of Ford’s expansion plans in India — the company is also planning a $1 billion plant in Gujarat, capable of producing 240,000 vehicles and 270,000 engines per year.

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If the EcoSport gamble falls through, Ford faces losing a large investment in a market that, although populous, is showing a general slowdown in sales. However, after the substantial losses in Europe, any market that Ford is able to expand in will likely be beneficial for the company.

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