UPDATE 1-Ford to put $500 mln in India; make small car, engines

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By Rina Chandran

MUMBAI, Jan 8 (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) said on Tuesday it plans to invest $500 million in India to double manufacturing capacity by 2010 and make a small car and engines, making the fast-growing market a key production hub in Asia-Pacific region.

The investment, which takes Ford's commitments in India to more than $875 million, comes on the heels of similar moves in Thailand and China, the other markets the U.S. car maker has identified as key to its regional growth strategy.

"We see China, India and ASEAN as three important markets for increasing our Asia-Pacific footprint," said John Parker, executive vice president for Asia-Pacific and Africa, referring to the south east Asian region.

"We're intent on developing these three markets with viable scale and critical mass," he said over telephone from Bangkok.

Ford, which last week named India's top vehicle maker, Tata Motors Ltd (TAMO.BO: Quote, Profile, Research, Stock Buzz) (TTM.N: Quote, Profile, Research, Stock Buzz), as the preferred bidder for its luxury Jaguar and Land Rover brands, will double its capacity in India to 200,000 vehicles a year by 2010, the company said.

Within the next two years it will begin production of a new small car for a bigger share of the dominant segment, and build an engine plant adjacent to its existing car plant near Chennai in south India.

Ford India will have an annual capacity to make 250,000 petrol and diesel engines, with the first diesel engines for its local Fiesta and Fusion cars rolling out in April, Parker said.