Ford Unveils New SUV in India - Analyst Blog


Ford Motor Co. ( F ) unveiled its new global compact sports utility vehicle (SUV)EcoSport at the 2012 India Auto Expo in Delhi, which is a part of its plan to roll out eight new models in India by 2015. The automaker plans to invest $142 million to manufacture the SUV at its Chennai plant in south India for the domestic and export markets.

Currently, Ford buildsFigo and Fiesta models at the plant. Last year, the automaker announced that it will invest $72 million to expand production capacity at its power train facility in the plant in order to support its sales and exports growth. The investment will enhance the plant's annual production capacity from 250,000 vehicles to 330,000 vehicles.

Ford's car launches in India are a part of its major expansion plan in the emerging countries, including Argentina, Brazil, China, India and Thailand. The latest expansion will bring Ford's total investment in India to more than $1 billion.

The company expects Asia will account for 70% of its global growth in the next decade, mostly from China and India. It also anticipates Asian sales volumes to double to account for a third of its global sales by 2020.

India has a fast-growing automobile market as less than 1% of its population owns a car. In fiscal 2011 ended March 31, 2011, the country's car sales grew 30%. However, sales are expected to be flat in fiscal 2012 on account of high interest rates and rising input costs.

According to JoeHinrichs , the president of Ford's Asia Pacific and Africa region, India will be the third largest market after U.S. and China by the end of the decade. Currently, Ford occupies about 4% of the Indian market, which is about the same share occupied General Motors Co. ( GM ) and Toyota Motor Corp. ( TM ).

Ford, aZacks #3 Rank (Hold) stock, posted a $66 million or 3.5% fall in profits to $1.85 billion in the third quarter of the year from $1.91 billion in the same quarter of prior year. However, on per share basis, earnings were 46 cents versus 48 cents a year ago, beating theZacks Consensus Estimate of 44 cents. The decline in profits was attributable to fall in commodity prices and anticipated reductions in Financial Services results.

Total revenues in the quarter went up $4.1 billion or 14.1% to $33.1 billion. This compared with theZacks Consensus Estimate of $29.8 billion.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: F , GM , TM

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