Ford unveils global small car, key to opening emerging markets

Reuters

By Deepa Seetharaman

DETROIT, Nov 13 (Reuters) - Ford Motor Co will launcha small car aimed at emerging markets next year, the toughesttest yet of Chief Executive Alan Mulally's strategy of building"global" models that can be sold in countries around the world.

Top Ford executives, including Chairman Bill Ford, were atthe company's Camacari plant in Brazil on Wednesday to showcasea concept version of the global Ka four-door, five-passengerhatchback, which will be introduced in Brazil next year.

Eventually, Ford will bring the global Ka to other emergingmarkets, including China, where more families are amassing thewealth needed to buy their first vehicle.

The Ka compact is the smallest and cheapest Ford vehicle toget a global overhaul, competing in what Ford calls the "sub-B"segment. The No. 2 U.S. automaker has long struggled to makemoney in this market, which is in the midst of significantgrowth and intensifying competition.

"These vehicles really are important to us globally to moveinto areas of the business where we have historically not hadgood share, not made money," said Joe Hinrichs, who leads Ford'soperations in North and South America.

"If you're going to grow, especially in the growing emergingmarkets around the world, you need to have this entry-levelfamily car," he said.

Ford expects global sales of small, low-cost cars to grow 35percent between 2012 and 2017, outpacing the expected 12 percentrise for the industry as a whole. Ford said 44 percent of themarket for "sub-B" cars will be in South Asia and South America.

The automaker now feeds this market with itscurrent-generation Ka and Figo, which are built on older,locally tailored vehicle platforms that Ford is increasinglyavoiding.

The global Ka, which shares components and an underbody withthe Fiesta and EcoSport compact crossover, represents the latesttest of Mulally's "One Ford" plan.

This strategy aims to cut Ford's costs by developing globalmodels that can be sold around the world, with a few tweaks forlocal markets. The strategy harkens back to Henry Ford's ModelT, which was exported around the world in 1913.

Ford's first global vehicle under Mulally was the Fiesta in2008, but developing a global car as small and cheap as the Kahas been a challenge.

Ford studied Maruti Suzuki India Ltd, HyundaiMotor Co and Kia Motors Corp and theirapproach to the global market for small cars, Ford ChiefFinancial Officer Bob Shanks said.

Ford did not discuss the price of the global Ka but said thecurrent Ka costs between $10,000 and $12,000 in Brazil, comparedwith $17,000 to $26,000 for the Fiesta. The current Ka is soldin Europe and South America.

The global Ka will rival the VW Polo, Fiat Uno and ChevroletOnix, Ford said. The redesigned Ka does not have a touch screenbut has a docking station to accommodate a smart phone, allowingthe driver to view navigation and other features.

"In these markets, you don't spend $1,000 for a navigationsystem," Hinrichs said. "But most everyone in these markets doeshave a smart phone. So it will dock in the center stack."

Brazil is the world's fourth-biggest auto market. Italy'sFiat SpA, Germany's Volkswagen AG, andU.S.-based General Motors Co and Ford sell more than 70percent of all new cars sold in that market.

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