Ford shelves compact car programme for emerging markets

Detroit—Ford Motor Co. has shelved plans to produce a new compact car family designed mainly for emerging markets like India and China, industry sources said, reflecting disappointing sales of mainstream models in the world’s fastest growing car markets. India and China were expected to be the main manufacturing hubs for the new B500 range, slated to begin production in 2018 and to include a premium sedan, hatchback and sport utility vehicle (SUV), said two sources with direct knowledge of Ford’s plans. The automaker had also planned to build its new models in Brazil, Russia and Thailand, one of the sources said.
Ford’s decision, communicated to its suppliers in July, follows a similar move by General Motors to postpone the launch in India and China of a new $5 billion family of compact vehicles, said two sources familiar with GM’S thinking. Ford’s program is on ice because of muted demand for some of its small and mid-sized hatchbacks and sedans in India and China, where SUVs and “crossovers” combining the hatchback and SUV have proved increasingly popular. The cost of upgrading plants to produce the new cars would also be prohibitively high, the sources following Ford said. All of the sources declined to be named as they have not been cleared to discuss the plans publicly.
Ford declined to comment on the development. “We are constantly evaluating opportunities to better meet the needs of consumers and do not comment on speculation about future product programs,” a Ford spokesman said in a statement. That said, Ford has invested over $2 billion in India and plans to spend more to set up a global engineering center in the southern city of Chennai that will help tweak products for the local market and more swiftly adapt to changing consumer trends.
The carmaker is also ramping up exports, including to Europe, to maximize usage of its two plants in India. “India is a key market for us in Asia Pacific,” said the spokesman, adding that the carmaker is committed to introducing new products and technologies in the South Asian nation.—Agencies

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