Boneham: Big numbers! We’ve installed a significant level of increased capacity and from an India perspective, we hope to grow our share significantly because we haven’t been in this segment where 70% of sales here in India. We’ve done well in the segments we’re in. Endeavour is the market leader in the SUV segment. Fiesta and Ikon–Ikon’s grown 400% year over year as we’ve put a diesel engine–but it’s in a small segment with a lot of competition. We’ve put in 200,000 installed capacity, we’re not going to use that all next year because you build it up gradually. But from an India perspective, where we are now in terms of market share we want to at least quadruple it.
Parker: This is a key regional product. It’s obviously designed with India in mind and the Indian consumer and the Indian market environment but we have not approached this as a product for the Indian market alone. I was in Detroit in January and our new small car was one of our first products that Derek Cusac, our global head of product development, brought up on the screen when he was showing a montage of the new products coming around the corporation. That just gives you an indication that what’s different between the Ikon days and Fiesta days is this product is integrated into the region and corporate system.
What sort of integration was there in the development process?
Parker: Well, first of all, we have one product development organization So, it’s a cooperative project between the Europe, Asia-Pacific and India teams.
Other manufacturers such as Hyundai and Maruti Suzuki have developed India as an export bases for their small cars. Given that there would be a certain cost arbitrage, would you be looking at developing India as an export base?
Parker: Oh, absolutely. The intention with our new small car is to export the product to other places within the Asia-Pacific region and potentially outside. So there’s a key export component of the project…
Boneham: As we move forward, we (India) will be the low displacement engine base for the Asia-Pacific and Africa.
Ford India has an installed capacity of 200,000. What sort of numbers of the small car are you looking to sell and export?
Boneham: It will be dependent upon the demand for the product. We’d love to utilize every one of those 200,000 but we won’t (be able to) do that immediately... Our localization strategy is key to this because 80-85% of this is vehicle will be localized here in India in terms of suppliers...
Parker: (interjects) But we’re not talking specifically about that the export volumes is. It will be substantial. The export volume will be substantial but we’re still working on those elements of the programme.
The Ford Ikon diesel (introduced in November) is priced very aggressively. How will the small car be priced?
Boneham: Yes. We want people to see this as a real value equation and the cost of ownership is made up of a number of factors not just parts. The first part of the cost of ownership is the purchase price and this new small car is going to be positioned right in the heart of that 70% we haven’t been a prying into. That means the sub-four meters and an engine capacity that gives us the right tax breaks.
John, you’ve spent a lot of time in research and product development. Most of the research and development being done in India is restricted to localization and hasn’t gone to the stage of say the face lift capability, collaborative design, full body change and so on…