In 2005, Standard & Poor’s slashed the bond rating of Ford Motors to “junk” status. According to Washington Post, the debasement came due to the big U.S. automaker’s loss of market share to its Asian competitors . The “biggest single cause” of its financial problems being its overreliance on gas guzzling SUVs which had fallen out of favor due to high gasoline prices. Although GotEngines.com. is still getting a lot of calls for used engines for these vehicles, apparently the ensuing poor profitability served as a wakeup call to the floundering giant and, among numerous other overhauls, Ford bought control of its 50-50 joint venture in India called Mahindra Ford India (now known as Ford Motor India).
Fast forward four years and it looks like Ford is doing in India what it should have done in North America a leap year ago: build small, efficient cars. Reuters reports that Ford plans to launch a new car model in India every 12 to 15 months over the next five years spearheaded by the 2010 Ford Figo, a 1.2-liter petrol engine subcompact hatchback named for beloved footballer Luis Figo. Expected to be priced between $6,000 to $8,000, the Ford Figo is aimed at India’s middle class, which has swollen to 300 million, according to Marketplace. The Ford Figo will also be available with a diesel engine outfitted with the same 1.4 Duratorq 68hbp motor seen in the Ford Ikon and Ford Fiesta.
The move signals what Ford Motor India’s president told Reuters: “Ford wants to be a mainstream player here.” Indeed, analysts see Ford’s position in India as integral to its plan to stay out of bankruptcy. Ford already has 2 percent of the Indian market with its larger cars like the abovementioned Ford Fiesta and Ford Ikon as well as the Ford Fusion and the Ford Endeavor, an SUV.
Ford has been ramping up its production in India as part of its plan to use it as a global manufacturing hub for compact cars and plans to produce about 60 percent of all its global car sales in India within the next 10 years.
Back in North America, Ford is just now starting to gain some headway after losing money every year since 2005. Detroit Free Press reports now that Ford has a pretax profit of $357 million in North America, thanks largely to the “Way Forward” launched in 2006 which made the entire operation and product line smaller and more efficient, if not the vehicles themselves. Ford took the spotlight off the SUVs and focused on the Focus – a fuel-efficient compact car also making the rounds in India and the Ford Fusion, which won Car of the Year by Motor Trend.
All in all, it looks like smaller cars are saving the day for Ford – both at home and abroad.
