Ford (NYSE: F) will probably sell its Jaguar and Rover units to India's Tata Motors (NYSE: TTM). But the U.S. car company wants to go beyond that and build its own presence in the huge country. Ford will put up $500 million to increase its manufacturing operations in India between now and 2010. It will also develop a small car for sale in the country.
"This new investment highlights the significance of India's role in our continued expansion and overall strategy for the Asia-Pacific and Africa region," John Parker, executive vice president of Ford for Asia-Pacific and Africa, told Reuters.
While India's car market is growing fast, Ford may find that it is a little late to a very competitive game. Large rivals from Europe, GM (NYSE: GM), and Toyota (NYSE: TM) all want a piece of the same market, and India has its own car companies protective of their turf.
GM announced that it hopes to have 75% of its sales overseas in 10 years. Ford probably has similar goals because the U.S. car market is both competitive and slow-growing. But that means that a number of companies are all trying to get share in the same markets -- India, China, Russia, and South America. Ford would not seem to have any big advantage in this race, and its fairly weak balance sheet is not likely to help it expand.
Douglas A. McIntyre is an editor at 247wallst.com.
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