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Ford may drive Mazda into the small car market

Ford may drive Mazda into the small car market

Author | Source: The Economic Times | Thursday, Sep 07,2006 8:26 AM

Ford may drive Mazda into the small car market

Ford Motor may make its debut in the small car market through its Japanese subsidiary Mazda Motor. Though Ford has remained tightlipped on its plans for the sub-Rs 5 lakh car market, sources in the know say that Ford has roped in Mazda to aid its foray into the segment.

Though it is not known what model the two companies will choose to launch in India, industry sources say the two companies are jointly developing a car for India which will be based on an existing Mazda platform and will be manufactured in Ford's Maraimalainagar plant.

When contacted Ford India president and managing director Arvind Mathew said, “The Indian auto market is growing rapidly, and the Ford Motor continues to explore all opportunities for growth. However, we have no firm plans at this time." Mazda Motor which manufactures over 1.25 million vehicles a year and sells them in Japan, Europe and North America is no stranger to the Indian market.

The company has been a long-time partner of Punjab Tractors in its Swaraj Mazda venture for manufacturing light commercial vehicles. The 10-year technical agreement between the two companies came to an end in October 2004, and Mazda opted out of the JV in August 2005 selling its stake to Sumitomo Corporation.

At the time of exiting the JV, Mazda said its focus had shifted from commercial vehicle to cars so it had no option but to sell out. "Mazda has been preparing to enter the car market for some time now and discarding the CV maker image was the first step in that direction.

The company is likely to make a backdoor entry as Ford already has an established presence in India and is a much stronger brand in the market," said an industry analyst. Ford has a 33.4% stake in Mazda. The two companies entered into a strategic relationship to enhance each others competitive strength through marketing and distribution alliances and 'badge engineering' - rebadging one model of a car as another.

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