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Ford (F)
Ford Driving in a New Direction
Bigger does not always mean better, just ask Ford Motors. Ford has unveiled its new, made-in-India small car today, which will hit the market during the first quarter of next year. The car manufacturer icon is hoping to capitalize on India's rapidly growing car market. Ford managed to escape the earlier financial meltdown without any of the U.S. government's bailout funding. However, the U.S. car manufacturer also realizes that its market share has been very low recently, and it is working hard to improve it. Ford currently controls 15% of the North American market, 10% of the European market, and only 2% of the Asian market. Ford Motors has identified the Asian market as the key to its future success. How will Ford's new small car improve its industry positioning overseas?
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Ford's secret weapon for penetrating the Indian car market is a vehicle called the Figo. The Figo is a four-door small car that is built on the Ford Fiesta chassis. Although Ford has not released any pricing information, analysts speculate that the Figo will sell for 300,000 to 400,000 rupees or $6,000 to $8,000. Ford's new small car will be positioned to compete against a slew of India's current small car offerings, including the high-end Tata Nano. Ford is trying to enter a very profitable and popular market segment with Indian car buyers. Small car sales were responsible for 70% of the country's annual car sales last year. Ford has even invested $500 million into its Chennai manufacturing plant in preparation for the Figo's release. Ford Motors intends to develop the car plant into the company's primary overseas production hub.
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However, Ford's global expansion initiative will not stop in India. The U.S. car manufacturer eventually wants to use the Chennai plant as a pipeline source to extend its scope in the Asian market, specifically China. Ford is mimicking a similar production model that Hyundai, India's largest car exporter, currently uses. It is also hoping to replicate the same level of success as its Korean competitor. Ford Motors would ultimately like to extend its reach into other Asian countries, but for the time being it is fully concentrated on India. The U.S. car franchise recognizes that the Indian car market has been the quickest to recover since the global economic downturn, and is one of the fast growing auto industries in the world.
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Overall, Ford seems to have a formulated a strong strategy to gain traction in the Indian market. It has developed a product that is in high demand by Indian consumers. In addition, Ford is looking toward the future as it plans for long term expansion into other countries in the Asian market. Ford Motors is working to develop its Chennai manufacturing plant into a potential "game breaker" in the overseas car industry. However, Ford's market share is currently ranked seventh out of the fifteen car manufacturers in India, so there is significant room for improvement. Ford is hoping to drive its new Figo to the top of the Indian car market, and eventually into the rest of Asia.
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More Ford Figo Related News
India: Ford Reveals All-New Figo -- A detailed description of the new Figo's design. Also includes pictures of the latest addition to the Ford family.
Fresh Paint -- Chennai plant to be the first with Ford's new paint technology. What exactly are the benefits of this new plant feature?
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