Is Ford Ready to Take Its Success Global?
On a visit to the southern Indian city Chennai, Monday, Alan Mulally, chief executive officer of Ford Motor Co (NYSE:F), made some important forecasts, Reuters reports.
Consumers should expect to see more Ford vehicles exported from India, such as the EcoSport compact crossover, that is expected to be launched from Chennai in late 2013 for the European market.
The U.S. automaker is shifting its energy overseas where it is working to streamline efforts, accelerate product development, and cut costs by using global platforms. Its goal this year is to build more than 85 percent of its volume using these nine global platforms.
It doesn’t come as much of a surprise that Ford its concentrating efforts in India, as the country’s auto market shows great promise for growth and is attracting more and more carmakers. The country is expecting to see a growth of 3.76 million vehicles over the next ten years — something General Motors Co. (NYSE:GM) has also caught onto. GM has already announced plans to introduce new models in the region with Chinese partner SAIC Motor Corp.
Although Ford anticipates great growth figures for the region, it also will need to anticipate different drawbacks that will add to the difficulty of realizing the automaker’s full success there. One of these reasons includes hypercompetitiveness, as Ford not only competes heavily with GM in the region, but also with Suzuki and Hyundai who hold 54 percent of its new-car sales. What these two competitors have proven, however, is that major market share doesn’t necessarily translate to major profits, and, Ford, along with GM, must work to produce vehicles that cater directly to their Indian consumers if it wants to turn our larger profit margins.