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Ford Hospatility

EXECUTIVE SUMMARY

The Indian passenger car industry is growing rapidly due to the entry of car companies from all over the world in India. Car companies have eyed India as a potential market for sales due to growing purchasing power among the India masses. Also India is a developing country with lot of potential for companies to invest. It is one the largest market in the world. This is evident by the entry of various world class automobile companies entering the country.

Ford India Limited is a subsidiary of Ford Motor Company, USA. Established in 1995, Ford India is headquartered in Maraimalai Nagar near Chennai.

Currently there are over 20 car companies in the Indian car market, with many more planning their entry.

The company has been undertaking good market strategies to sell its cars, and also attracting the attention of potential buyers through effective advertisements on television, newspapers, auto magazines and other forms of media.

The company paid more importance to the newly developed DURA technology currently used in the Ford Fiesta which is a world-class revolutionary petrol and diesel engine technology patented by Ford.

Lastly the project is an effort to analyze, the automobile industry as in India with special emphasis on Ford India.

INDIAN BACKGROUND FOR PASSENGER CARS

The passenger car industry in India grew at a nominal CAGR (Compound Annual Growth Rate) of approximately 3.6% during the 1960s and the 1970s. Sales of passenger cars were limited by supply. There were only two manufacturers in the market, Hindustan Motors and Premier Automobiles, and they had limited production capacities. The import of passenger cars was restricted to the State Trading Corporation (STC) and foreign diplomats. There were quantitative restrictions on imports. The rate of customs duty levied on cars was 225%.

Since, 1991 opening of the economy has changed the face of auto industry. Today, it is amongst the main drivers of growth of Indian...