Ford shelves compact car program for emerging markets, setback for India

Fri Sep 2, 2016 12:05pm EDT
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By Aditi Shah and Paul Lienert

NEW DELHI/DETROIT (Reuters) - Ford Motor Co (F.N: Quote) 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), two sources with direct knowledge of Ford's plans told Reuters.

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 (GM.N: Quote) to postpone the launch in India of a new $5 billion family of compact vehicles.

Ford is now planning to redesign the EcoSport, Figo and Figo Aspire in India in 2020-2021, according to two separate U.S. sources familiar with Ford's plans.

Its more ambitious B500 program, though, is on ice because of muted demand for some 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 first sources said.

All of the sources declined to be named as they have not been cleared to discuss the plans publicly.   Continued...

Workers assemble Ford cars at a plant of Ford India in Chengalpattu on the outskirts of Chennai, India March 5, 2012.   REUTERS/Babu/File Photo