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Ford launches small car in India; sees US market upturn

Ford Motor Co will start production of a small car in India early next year, and its chief executive said the US market had was showing signs of recovery and he expected industry sales to rise in the next two years.

The No. 2 US automaker is focusing on small cars, which it feels will increasingly drive sales, and chief executive Alan Mulally said the fast-growing Asia Pacific market will play a bigger role in Ford's global sales.

“We expect the small car segment will double in the next 10 years,” he said at the launch of the Figo, Ford's new small car, in the Indian capital of New Delhi.

“When you look at vehicle size, about 60% of the vehicles worldwide would be smaller vehicles like the new vehicle here.”

The company did not disclose the Figo's price, but Mulally said Ford was not looking to directly compete with Tata Motor's Nano, the world's cheapest car at around $2,000 which hit Indian roads earlier this year.

“Right now we are going to focus on the larger portion of the (small car) market, which is the B size. So, we don't have plans to compete in the A size, or sub-B right now.”

Ford will make the Figo at a plant in the southern Indian city of Chennai, which it plans to make a global production hub.

The company is investing $500 million in the plant, which will have annual capacity of 200,000.

India's domestic auto market is relatively small, especially considering a population of more than 1.1 billion, with about 1.5 million passenger vehicles sold last year.

It is however a fast-growing market, even in a global auto downturn. For the first four months of the 2009/10 fiscal year (April/March), domestic car sales rose nearly 10% from a year earlier. (Reuters)