DETROIT Nov 13 Ford Motor Co will launch
a small car aimed at emerging markets next year, the toughest
test 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 at
the company's Camacari plant in Brazil on Wednesday to showcase
a concept version of the global Ka four-door, five-passenger
hatchback, which will be introduced in Brazil next year.
Eventually, Ford will bring the global Ka to other emerging
markets, including China, where more families are amassing the
wealth needed to buy their first vehicle.
The Ka compact is the smallest and cheapest Ford vehicle to
get a global overhaul, competing in what Ford calls the "sub-B"
segment. The No. 2 U.S. automaker has long struggled to make
money in this market, which is in the midst of significant
growth and intensifying competition.
"These vehicles really are important to us globally to move
into areas of the business where we have historically not had
good share, not made money," said Joe Hinrichs, who leads Ford's
operations in North and South America.
"If you're going to grow, especially in the growing emerging
markets around the world, you need to have this entry-level
family car," he said.
Ford expects global sales of small, low-cost cars to grow 35
percent between 2012 and 2017, outpacing the expected 12 percent
rise for the industry as a whole. Ford said 44 percent of the
market for "sub-B" cars will be in South Asia and South America.
The automaker now feeds this market with its
current-generation Ka and Figo, which are built on older,
locally tailored vehicle platforms that Ford is increasingly
The global Ka, which shares components and an underbody with
the Fiesta and EcoSport compact crossover, represents the latest
test of Mulally's "One Ford" plan.
This strategy aims to cut Ford's costs by developing global
models that can be sold around the world, with a few tweaks for
local markets. The strategy harkens back to Henry Ford's Model
T, which was exported around the world in 1913.
Ford's first global vehicle under Mulally was the Fiesta in
2008, but developing a global car as small and cheap as the Ka
has been a challenge.
Ford studied Maruti Suzuki India Ltd, Hyundai
Motor Co and Kia Motors Corp and their
approach to the global market for small cars, Ford Chief
Financial Officer Bob Shanks said.
Ford did not discuss the price of the global Ka but said the
current Ka costs between $10,000 and $12,000 in Brazil, compared
with $17,000 to $26,000 for the Fiesta. The current Ka is sold
in Europe and South America.
The global Ka will rival the VW Polo, Fiat Uno and Chevrolet
Onix, Ford said. The redesigned Ka does not have a touch screen
but has a docking station to accommodate a smart phone, allowing
the driver to view navigation and other features.
"In these markets, you don't spend $1,000 for a navigation
system," Hinrichs said. "But most everyone in these markets does
have a smart phone. So it will dock in the center stack."
Brazil is the world's fourth-biggest auto market. Italy's
Fiat SpA, Germany's Volkswagen AG, and
U.S.-based General Motors Co and Ford sell more than 70
percent of all new cars sold in that market.