The Indian car industry is heading for tough times with clear indications of growth slowing down. But US car major Ford announced a Rs 4,000 crore investment in its second assembly plant to come up in Gujarat last week. Joseph Hinrichs, president, Ford Asia Pacific and Africa, tells Hindustan Times what makes him so confident about the market here. Excerpts
How important is India for Ford globally?
India is very critical for us to achieve our stated target of selling 8 million cars every year by 2015. We expect the Indian market to grow and become the third largest car market in the world behind China and US and hence bigger than Europe, by the end of this decade. It is obvious then, that if we do not take this market seriously and don't grow here, it would be very difficult for us to achieve that target.
There is a shift in global demand for cars from developed to emerging markets. How prominent is that in Ford?
If we look at the chunk of the emerging markets and I as the head for Asia Pacific and African regions, then this region contributes 16-17% of all Ford cars sold worldwide. By 2020, I expect this share to double to 33-34% or every third Ford sold then would be in these markets. Around 60-70% of the growth is going to come from these regions.
Are you happy and satisfied with what you have achieved in India so far?
I am happy but not satisfied as India can offer much more to us and vice versa. The success of the Figo shows what it means getting it right in the volume segment in India and that excites us. But we are not adequately present in the market here either by way of products or distribution to fully utilise its potential. In the US, our marketshare is 17%, in Europe it is 8.8%, in Brazil it is 10% but in India and China it is nearly 3% each. We do not have enough products here but we do aspire for that kind of marketshare in India as well.
You have announced a 2.4 lakh car plant when the industry is witnessing a slowdown in sales. Does that concern you?
In the short term, it does affect but these plans are always for the long term. This industry is cyclical and temporary slowdown is part of the game. A 30% plus growth that India and China witnessed last year was not sustainable anyway. China over 10-15 years is a big growth story but people forget that China saw three such slowdowns in the last six years. So growth will often take a breather.
How does your expansions in the emerging markets compare to other parts in the world?
We are building seven new factories in the world and all of them are either in India, China or the ASEAN countries.
Do you expect a China-like boom in India and if so by when?
In China, the total market was 3 million in 2003 that tripled to 9 million in 2008. Since then it has doubled to 18 million in 2010. It is obvious that such a boom is possible in India because the potential here is so huge. I believe by 2015, people in the tier II, III cities here would reach a stage when they can afford to buy a car. That is when growth will take off like never before.