Ford Figo, the compact model, already one of India's best-selling vehicles, was awarded the prestigious prize December 15 at a ceremony in Mumbai.
The Figo beat a field that offered several small vehicle challengers, with the Chevrolet Beat, Maruti Suzuki Wagon R, Nissan Micra, Skoda Yeti, Tata Aria, Volkswagen Polo and Volkswagen Vento also in the running.
The Indian Car of the Year is awarded by a panel of automotive journalists modelled on the selection process used by the European Car of the Year award and this year's eleven judges included journalists from Auto Bild, Auto India, BBC Top Gear, Business Standard Motoring, Car India and Overdrive.
"The Figo's crisp driving dynamics, two fuel-efficient engine options, cheerful styling and interiors and, of course, its terrific pricing, simply propelled it to the top of the honours list," said Srinivas Krishnan, editor of Business Standard Motoring and Chairman of ICOTY 2011.
"It's only appropriate that the Figo has won the Indian Car of the Year 2011 award, because Ford engineered the car specifically to cater to the needs of the Indian market."
Last year's award went to the Tata Nano.