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Indian unit to drive Ford’s 100 emerging markets push

Ford’s Indian operations MD Anurag Mehrotra has been tasked with product portfolio management in tandem with Mahindra to cater to the 18-million-unit-per-annum market.

, ET Bureau|
Jul 16, 2019, 11.33 PM IST
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MUMBAI: Having carved out China as an independent market from the Asia-Pacific region, US carmaker Ford Motor has formed an International Markets Group (IMG) consisting of 100 emerging markets as a separate cluster.

The IMG structure will be operational by January 2020, and the company's Indian subsidiary, supported by its strategic alliance with Mahindra, is expected to play a crucial role in its future growth map. Ford’s Indian operations MD Anurag Mehrotra has been tasked with product portfolio management in tandem with Mahindra to cater to the 18-million-unit-per-annum market.

A Ford India spokesperson confirmed the formation of IMG as well as the additional responsibility given to the leader of its India operations.

While sharing of vehicle architectures and engines has been announced, including the electric and connected vehicle technology, people in the know said the discussion goes beyond India to build economies of scale and participate in the next growth opportunities outside of India.

Despite being in the Indian market for over a couple of decades, Ford India has not been able to build volumes beyond 1-1.2 lakh units per annum; ditto for Mahindra & Mahindra’s passenger vehicle division which has remained between 2.5 lakh and 3 lakh units over the last five years.

For Mahindra, the export markets have remained suboptimal at about 5-7% of the total sales, whereas Ford is likely to shift its export focus to the emerging markets with new regulations in evolved markets of Europe and North America turning increasingly stringent.

“It will accelerate Mahindra’s globalisation strategy and for Ford — joint projects on B and C segment SUVs and MPVs — with the help of Mahindra’s best cost sourcing capability will ensure optimised product development cost. The world is moving towards compact utility vehicles and joint projects with Mahindra will be at the core of the offerings for Ford,” said a person in the know.

The sharing of C segment SUV architecture is announced and more products based on the B segment are expected to be formalised soon, including electric vehicles.

With Indian operations achieving a breakeven and sustaining profits, Ford has committed a fresh billion dollars towards the Indian market.

Mark Ovenden, who was president for Ford Middle East and Africa, has been named the president of International Markets Group and will lead its formation. IMG will become a reporting business unit from 2020.

The company’s new business unit will oversee nearly 100 markets, including its operations in Africa, ASEAN, Australia, India, Mexico, the Middle East, New Zealand and South Korea, as well as a number of emerging and distributor markets around the world.

Ford Global believes emerging markets are expected to account for one in three vehicle sales in the future and some of the highest growth markets will be in this cluster.

The formation of the IMG will be fuelled by its leading market positions in compact pick-ups and commercial vehicles as well as optimising the company’s import portfolio and maximising after-sales opportunities.
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