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November 05, 2008 17:51 IST
US carmaker Ford, which is investing $500 million in its Indian operation, said on Wednesday the company's expansion plans in the country are on track despite a global slump and economic downturn.
"The current world economy is creating some tough times for car business as a total. Credit crunch and the lack of confidence among consumers and banks have created short-term impact but our Indian plans are on track," Ford India president Michael Boneham told reporters.
Earlier this year, the company had announced an investment of $500 million in India for a new engine and transmission plant in Chennai and development of a small car to be launched by 2010.
"Ford is confident that we will be a big part here. Our capacity enhancement programme and the small car project will continue as announced earlier," he said.
Ford would launch a new small car in India in 2010, he said, adding the company was expecting a "great growth of market share" after the launch.
"We expect the next year to be a tough one for the industry with a single digit growth. Our company is also expecting the same but we expect the new Ikon playing a key role to tide through the tough phase," Boneham said.
The sales in the current financial year would be flat compared to last fiscal, he added. Boneham said the small car that the company plans to launch would have an initial localisation of about 75 per cent in components and would gradually increase it.
"The Indian operation has significantly contributed to the research and development of the car," he said adding that unlike Suzuki and Honda, which plans to make India an R&D hub, Ford would continue to leverage on global operations for its product lineups.
He said the small car would cater not only to the domestic demands but would also look for exports.
"There will be a lot of demand in India and majority will be for local consumption, but we do expect an export oriented product," Boneham said.
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