Parker: No I think it goes a little beyond that. We’ve taken the base product and we haven’t done what you call full top hat design but we’ve done substantial modifications of the product to suit the Indian consumer, Chinese consumers, etc., and the environmental conditions that they operate in. And you’ll see more of that on the new small car. One of our clear intentions in R&D is to develop our components both here and in China because we do believe that more of the engineering activity has to start moving to more of an Asian base.
We do a little bit of computer aided engineering work here on a global basis. And we’re very intent on growing that capability. Ford India product development activity doesn’t report to Mike (Boneham of Ford India) but to regional product development, which in turn doesn’t report to me but to the global head of global product development.
How has the Indian government been (in supporting the auto industry)…
Parker: I think the Indian government has been responsive and proactive but I’d have to say the most responsive and proactive has been the Chinese government.
What exactly has the Chinese government done?
Parker: They’ve got a massive economic stimulus package in the same way India has but they’ve also got a component of that focused on the auto industry. I don’t think India has that. In China, they’ve got specific incentives in the rural areas to encourage people to move out of the three wheel trucks into four wheel products. They have, for example, given a very substantial tax break from 10% down to 5% on all products below 1.6 litres for the rest of this year. Those two are specifically aimed at the auto industry and the Chinese government has said they want the auto industry to be a 10-million-unit industry this year, so there’ll be a 10% growth from last year. They’ve got a target in mind and they’re very aggressively pursuing their target.
The Indian government has also been responsive…
Parker: They’ve done some tax changes as you know: 24% down to 20%. I still see a big gulf between the small car tax regime and whatever is considered large cars and so, from my perspective, I probably want to see a rationalization and evening out of the tax regime but they have been responsive, particularly the Tamil Nadu government as well.