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Ford India, the seventh largest player in the domestic passenger vehicle market, has emerged as the largest exporter in February. Last month, the company shipped more cars than Hyundai and Maruti, the two top exporters. With a low single-digit growth and expanded capacity following the commencement of Gujarat plant last year, exports have become critical for Ford.
The US car maker shipped 11,823 vehicles to around 50 export destinations last month. Ford exports EcoSport, Figo and Figo Aspire to markets such as Latin America, West Asia and Africa. Maruti Suzuki, the country's largest car maker, shipped 9,336 units while its nearest competitor Hyundai exported 9,013 vehicles.
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Hyundai has remained the largest exporter for the past many years. In the April to February period of the current financial year, the South Korean car maker exported 151,970 units and is way ahead of Maruti's 113,447 units and Ford's 97,202 units. Unlike Hyundai and Maruti, Ford exports significantly higher units than its domestic sales.
The car maker is focusing on export market to have a reasonable capacity utilisation and bring greater economies of scale. Both Hyundai and Maruti have seen a high double-digit domestic sales growth this year and have accorded a greater priority to local demand.
Rakesh Srivastava, senior vice-president (sales and marketing) at Hyundai, said: “Export has always been part of our business strategy. But, to free up additional production capacity for domestic market we have currently stopped exports to the big European market while working to sustain the leadership position in domestic market.”
Hyundai is operating its two plants in Chennai at 95 per cent capacity. Maruti is also operating at a near full capacity.
Ford inaugurated its second Indian plant at Sanand in Gujarat in March last year with an annual capacity of 240,000 vehicles. The first plant at Chennai had a capacity of 200,000 vehicles. The company sold a total of 156,841 units (75,138 in domestic and 81,703 overseas) in the last financial year.
In the first 11 months of the current financial year, the company sold a total of 169,486 units (72,384 in domestic and 97,202 exports) against a capacity of 440,000 vehicles, indicating a capacity utilisation of less than 50 per cent. Ford did not respond to queries on its export targets.
“Ford is trying to execute a strategy to expand in Indian market. While that is going to take time for various reasons, export comes as a big opportunity for the company. The Sanand plant was set up with an export focus,” said Abdul Majeed, partner at Price Waterhouse.
