US automobile manufacturer Ford is studying the feasibility of launching a compact car in India that will be imported as a completely-knocked-down kit from a manufacturing hub in Thailand.
The plan leverages India's free trade agreement signed with that country in October 2003.
Ford is building a car plant in Thailand in alliance with Japanese automobile company Mazda. Ford owns 33 per cent in Mazda.
The joint venture, called AutoAlliance Thailand, will make compact cars starting 2009 for the domestic and Association of Southeast Asian Nations markets. The Mazda2 is already available in the US and the UK.
The Mazda2 is based on the platform for the Fiesta, which is a small car in Europe but a mid-segment offering in India.
It will be positioned in the 'B-plus' segment, competing with the Maruti Swift and Hyundai Getz (which have 1.3 litre engines) and the yet-to-be-launched Volkswagen Polo, Honda Jazz and Fiat's Grande Punto among others.
Ford wants to introduce the small car to India in 2009-10 when other global giants, including Honda, Toyota and Volkswagen plan to bring competing products to the local market.
Ford is also looking at launching the premium mid-sized sedan Focus from Thailand. Industry sources say that the Focus may be one of Ford's next India launches as soon as 2008.
When contacted Scott McCormack, vice-president, marketing and sales, Ford India, said, "I will not be able to comment on that, but we are evaluating options for India and when there is a suitable and viable opportunity we may consider it."
Many automakers are leveraging the FTA between India and Thailand where they can build plants to cater to the vast Asean market.
Given that labour costs are roughly at par with those in India and the import duty on CKD and semi-knocked-down kits is 10 per cent, car-makers may find it more viable to assemble Thai imports rather than set up fresh plants in India.
For instance, Tata Motors, which has set up a pick-up manufacturing plant in Thailand, will be sourcing trucks starting next year for the Indian market. Ford already sources CKD kits for the Endeavour sports utility vehicle from its plant in Thailand, which are assembled at its Chennai plant.
Ford has seen a steady decline in sales this year. Even as US counterpart General Motors has grown more than 50 per cent so far this year, Ford India saw sales fall 6.5 per cent.
The company sells four models in India -- the Fiesta, the ageing Ikon, the Fusion and Endeavour. All four models collectively sell about 3,500 units a month.
