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India is a tremendous market for us: Alan Mulally

Corporate Jan 5, 2012

Why Ford's EcoSport launch is significant for India

By Pranbihanga Borpuzari

When Ford took the covers off its new compact sports utility vehicle (SUV), EcoSport, ahead of the Auto Expo in the national capital, it marked the second of the eight global vehicles set to be launched in India by the middle of this decade (the first was the all-new Fiesta launched last year).

The global unveiling of EcoSport is significant for a number of reasons.

That Ford chose India to unveil the car shows it is very serious about this market. The unveiling also marked the second time Ford Chief Executive Alan Mulally flew down to India in so many years.The last time Mulally was in the country was during the unveiling of the Figo.

Alan Mulally, President and CEO of Ford Motor Company. Reuters

Part of the "One Ford" strategy -- a simple concept of building one product for multiple markets rather than a bunch of different ones tailored to national or regional tastes -- Mulally is convinced that the only way to make money on cars is by spreading development and other costs over one huge, global market.

The second reason EcoSport is significant is that it will feature, for the first time, Ford's 1-litre Ecoboost engine.

While it may seem ridiculous that an engine that one can fit in a backpack can power an SUV, the engine is very capable, according to Ford.

The engine will feature a turbocharger, direct injection and twin independent variable camshaft timing (Ti-VCT). More importantly, the mill will offer performance that rivals the 1.6-liter four-cylinder engine used in the Fiesta.

That implies power of about 120 PS and a torque of 170 NM. While details of the engine are sketchy, for the gasoline direct injection engine, highly pressurised fuel is injected directly into the combustion chamber of each cylinder rather than the convention of mixing with incoming air in the inlet port.

The advantages of this include more precise delivery of fuel for lower emissions, improved volumetric efficiency and avoidance of knock for better performance and fuel efficiency.On the turbo power front, energy from the engine's exhaust - that would otherwise be wasted - is used to rotate a turbine wheel.

The turbine is coupled to a compressor that pressurises incoming air, significantly increasing the output per litre of the engine. The traditional disadvantages of boosting - turbo lag and knock - are mitigated by the synergy with direct injection.

The company claims it will deliver 20 percent more fuel efficiency compared with a similar petrol engine.

Retail sales of the EcoSport in India will start later this year and the company is investing $142 million to build the model at its plant near Chennai.

The new car has been developed in Brazil in partnership with Ford teams from Asia, Europe and North America. An interesting aside: Ford has sold 700,000 units of an older version of the EcoSport in Brazil over the past nine years.

Another interesting point to note is that EcoSport has a real chance of winning excise concessions.

Currently, small cars measuring under four metres in length with engine capacities of up to 1,200cc (petrol) and 1,500cc (diesel) get a concessional rate for excise duty is 10 percent.

The EcoSport in Latin America measures about 4.2 metres, and if the new vehicle can shave off some additional length, the one-litre engine would ensure duties are cut. That will enable the company to price the car even more aggressively.

For a company that did not participate in the Delhi Auto Expo before 2006, Ford has been gaining market share in India since it introduced the Figo hatchback in March 2010, which it also exports to 32 countries. The company sold 96,270 vehicles in India in 2011, a growth of 15 percent. Ford India also exported 22,521 cars, almost three times as much as it did in 2010.

Pranbihanga Borpuzari works with the Entrepreneur magazine


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