Ford in the US may not be doing so well, but in India, Ford has big plans of entering the voluminous small-car segment with a new car by 2010.

It will be built for Indian customers driving in Indian conditions on Indian roads. There will two variants, one with a 1200cc petrol engine and the other with a 1500cc diesel power-train. The reason for the 1.2L capacity of the petrol engine is probably to secure excise duty cut.

The car will be made of 85% local parts. The company is currently testing 300 prototypes of the car.

Ford India has invested USD $ 900 million in the country. Out of that, USD $ 500 million will be used to set up a new engine plant and the small car project as well as increasing the vehicle assembling capacity from 0.1 million units to 0.2 million units.

Ford has signed a MoU with the Tamil Nadu government for a fresh investment of USD $ 400 in the auto sector.

The new plant will have a production capacity of 100,000 units annually. It will also produce 250,000 engines per year. Some of these engines will be imported to the Asia-Pacific and Africa.