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

The recent Tata-Jaguar-Land Rover deal paved way for entering of high end heavy vehicles like, SUVs, MUVs to India, but it is a known fact that the Indian Market is and will always be dominated by Small cars and this segment always invites new palyers. The same is with the company which soldjaguar-Land Rover to Tata i.e. Ford Motors.  

Ford Motor Co said 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.

This will have a major impact on India because, India will become a strategic production hub for small and affordable cars at Ford, which joins a growing list of carmakers focusing on small cars as oil topped $100 a barrel and the move to fuel-efficient "green" cars gains momentum.

But Ford will not compete at the low end of the price spectrum because it expects India's booming economy will quickly increase the purchasing power of consumers, Parker said, without giving more details about the planned car. "With the continued movement of people away from motorbikes and as the Indian GDP strengthens, people will move up."

Ford's new facilities and capacity expansion will create more than 9,000 direct and indirect jobs, it said. It also added 20 new dealers in 2007, taking the total to 130 in the country. "Our objective is profitable growth and focusing on the right brand, product and distribution strategy, which will also give us a respectable market share."

So what will be other companies do, how will they tackle with this. What will be other trends in this industry, just wait and watch and if you know something please share it with our readers..