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Ford Puts The Brakes On Emerging Market Compact Car Program

Ford Motor Company NYSE:F - Ford Puts The Brakes On Emerging Market Compact Car Program

Reuters reported Friday morning that Ford Motor Company F 0.48% scrapped plans to produce a compact family car intended for emerging markets such as India and China.

Reuters, citing "industry sources," noted that Ford's decision to abandon its plans is due to disappointing sales seen in its mainstream models within the two emerging markets. Specifically, Ford has seen "muted demand" at a time when larger SUV vehicles and crossovers are gaining popularity in India and China.

Ford planned to begin production of a premium sedan, hatchback and sport utility vehicle (SUV) in 2018. The company was also eyeing other emerging markets for its new vehicles, including Brazil, Russia and Thailand.

"We are constantly evaluating opportunities to better meet the needs of consumers and do not comment on speculation about future product programmes," a Ford spokesman told Reuters in a statement.

Despite the report, Ford is still active within the emerging market segment and has already invested more than $2 billion in India alone to set up a global engineering center. The investment will better allow the company to react more quickly to changing consumer trends.

"The global shift to crossovers makes competing in small cars a tough proposition for GM and Ford," Sam Fiorani, vice president of global vehicle forecasting at U.S.-based AutoForecast Solutions also told Reuters. "It makes more sense for them to refresh older products now, harness lower development costs in China in the mid-term, and move toward small crossovers over the long haul."

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