Auto giant Ford launched its bid to enter India's lucrative small car market on Tuesday, unveiling a brand new model to compete with international rivals from General Motors, Volkswagen and Hyundai.
The Figo, which will be made at Ford's plant in the southern Indian city of Chennai, is the latest attempt by a global manufacturer to tap into huge demand for compact cars in India's booming consumer society.
The petrol version will cost about 8,700 dollars, making it significantly more expensive than ultra-low-cost local models such as Tata Motor's famous Nano, which sells at less than 3,000 dollars.
Nissan, Renault, Toyota and Honda are all poised to launch small cars for the Indian market within the next two years. Volkswagen has already launched an India-made Polo, while General Motors sells its Beat model in the country.
The Figo, which Ford said would be built from 85 percent Indian-supplied parts, made its debut in the capital New Delhi.
"This is the right product and at the right price," Michael Boneham, president of Ford Motors India, told reporters.
"We are not in the business to lose money. You can get profits of scale and you can also compete in a very price-sensitive environment."
Small cars, or hatchbacks, comprise nearly two thirds of car sales in India, with Japanese firm Suzuki controlling more than half the market through local brand Maruti.
Car sales have been on the rise in Asia's third-largest automobile market due to inexpensive loans, the launch of new models and a recovery in demand.
The Indian market is forecast to triple over the next decade to six million cars a year from the current two million, according to industry figures.
The country is fast turning into a battleground as global carmakers seek new growth regions to offset anaemic Western sales.
- Dow Jones Newswires contributed to this report -Reuse content