Vehicle sales in India, the second-fastest growing auto market in the world, grew a record 30 percent in 2010 as the burgeoning middle class in Asia's third-largest economy spurred demand. That growth is expected to halve this year.
"We expect to be in line with or around the market place this year. In terms of overall, wholesales (including exports), we'll be up significantly," Michael Boneham, president and managing director of Ford India said in an interview.
The car maker sold more than 51,000 units, including exports in the first five months of 2011, a year-on-year growth of more than 71 percent.
"I expect exports to continue to be, on an ongoing basis, a more important part of our overall strategy," Boneham said.
Ford said it has been seeing increased demand for its compact Figo model, which it began exporting in August last year.
The company, which also sells the Fiesta sedan, recently said it would invest $72 million to increase production capacity at its engine assembly plant in the southern Indian city of Chennai to support its sales and export growth plans.
"We expect a significant level of investment moving forward on the back of eight new products that we plan to launch by 2015," Boneham said.
A number of global automakers in India such as Toyota, Honda , Volkswagen, Nissan and General Motors are lining up new models and boosting investment in the country, responding to brisk demand in Asia's third-largest economy.
In April, General Motors' India unit said it aims to grow at twice the rate of the country's automotive sector in 2011, while Hyundai Motor Co's Indian unit said sales will rise 15 to 17 percent this year.
Asia's third-largest economy, with its near 9 percent growth, remains attractive for automakers and global players have increasingly relied on growth in China, India and other emerging economies to offset weak sales in their home countries.
However, Boneham echoed concerns of Indian and foreign automakers over rising commodity prices and input costs.
The rising costs of steel, rubber and other raw material have pushed some automakers to raise prices of their vehicles this year.
A record 8.6 percent hike in petrol prices last month and a likely hike in interest rates in June have fuelled concerns about slowing demand for cars in India.
"In the last couple of months, we've seen a tremendous swing to diesel in the market due to the differential between diesel and petrol prices here in India," Boneham said. (Reuters)
