India to be Small Car hub for Ford

NEW DELHI: Alan mulally, the 64-year-old messianic chief executive of Ford Motor Co, aims to realise in India the dream of his company’s legendary founder Henry Ford: opening up the highways for everybody.

The former Boeing executive, under whom Ford avoided the embarrassment of having to seek a US government bailout that rivals General Motors and Chrysler had to avail of, is a fan of India’s “frugal engineering” capabilities and plans to make the country Ford’s small car hub. In a departure from the past, Ford also plans to bring all its models into India, attempting to catch up with rivals and gain greater traction in the red-hot Indian car market .

“This is a new Ford,” Mr Mulally told ET NOW in an interview. “Our commitment is that we will bring all the vehicles that we have to the markets that we serve. The Figo is just one part of that larger vision.”

Ford, which rolled out the rickety Escort cars in 1998 in a joint venture with the Mahindras, is realising its folly of not producing right-sized and right-priced vehicles in India, a flawed strategy that saw it cede space to Asian rivals such as Hyundai and Honda. It has now launched the small car Figo to take on Maruti Suzuki’s WagonR and Swift, and Huyndai’s i-10.

Mr Mulally has been on course to deliver what he had promised for the US auto maker. He cut costs, eliminated staff and helped the company post a quarterly profit, though an annual profit still eludes him. Its shares are soaring and its sales have beaten cross-town rival General Motors in February — after more than a decade.

He achieved most of the targets because of what he calls “laser focus” on his ‘One Ford’ plan, which he announced when he took over in 2006. He pledged the Ford brand and other assets to borrow $23 billion, which he then termed as “the world’s largest home-equity loan”.

While global car makers, such as Italy’s Fiat and France’s Peugeot, are looking for alliances to improve efficiencies, Mr Mulally is selling brands, factories and cutting jobs.

“Back then we took a very important call — that we will be laser focused on the Ford Blue Oval brand worldwide,” Mr Mulally said. “It’s a brand people recognise and appreciate, and we want to grow it and be focused on it.”

That has meant saying goodbye to a cache of iconic European brands — Aston Martin, Jaguar-Land Rover and now Volvo Cars — so that the focus of all innovation and attention of the group is on the mother brand.

Like Carlos Ghosn, CEO of Renault-Nissan, Mr Mulally is a fan of India’s frugal engineering expertise. And with the Figo, he is looking to make India Ford’s small car hub.

“(Ford will) absolutely make India its small car hub. India is a tremendous operation for us, it has tremendous capability in all elements of the automobile business, including design, and it’s already integrated with our entire global system. So India will continue to take a more important role for us worldwide,” he said.

And his larger mission is to fulfil the dream of its founder. “Henry Ford used to say, ‘We want to open up the highways for everybody’,” said Mr Mulally. “We want to do just that in India.”

Ford Unveils Small Car 'Figo'

US auto giant Ford Motor Co Wednesday unveiled its first small car for the Indian market, "Ford Figo".
The Figo, which is colloquial Italian for "cool", will be manufactured at the company's Chennai facility and launched in markets by early 2010.

The Chennai unit is undergoing a $500-million upgrade as Ford seeks to make India a global production hub for its small cars.

"The Figo is designed to compete in India's small car segment, which accounts for more than 70 percent of the market," said Ford's global president and chief executive Alan Mulally, who unveiled the car at a function here.

The company, however, declined to give specific details like price and engine capacity.

"Ford is reserving further details about the car till its launch in early 2010," said Mulally. Asked about the price range of the Figo, Michael Boneham, Ford India president and managing director, said: "It's going to be very competitive with the current market leader and will offer a tremendous value for our consumers."

Maintaining that Ford Figo would be "a big game changer" for his company, Boneham said: "It will transform our brand into a volume player in India."

Ford is also planning to double its manufacturing capacity at its Chennai facility to 200,000 units per annum by 2010.