Ford Motor Company has confirmed that it is investing up to 200 million euros (Rs 1,528 crore) to manufacture the EcoSport compact SUV at its Craiova Assembly Plant in Romania starting in end-2017.

The Craiova Assembly Plant will supply the EcoSport for sale in all of Ford’s European markets, excluding Russia. This decision follows a surge in EcoSport sales in Europe. 

As is known, the EcoSport sold in Europe, excluding Russia, is currently built at Ford India’s Chennai Vehicle Assembly Plant. However, the Chennai plant will continue to build the EcoSport for domestic Indian market sales and for other export markets around the world.

“EcoSport sales are up nearly 30 percent this year and given the continued outlook for sales growth in the small SUV segment, it’s the right time to move EcoSport production to Europe and take advantage of the excellent workforce and operations we have in Craiova,” said Jim Farley, president and CEO, Ford of Europe.

SUVs are the fastest-growing segment in the European new vehicle market, up 23 percent last year compared with an overall industry sales growth of 10 percent. The small SUV segment in which the EcoSport competes rose 44 percent in 2015. Ford expects the small SUV segment to grow to about 1.5 million vehicles a year by 2017 – an increase of 35 percent on 2015.

While Ford India has another year to continue supplies of Made-in-India EcoSports, the planned production shift to the Romanian plant will hit the company's export numbers. The EcoSport ranks as the best export model for Ford India and in February 2016, 8,309 units (petrol and diesel models) were shipped to Europe. Thus far in the ongoing fiscal year (April 2015-February 2016), Ford India has exported 97,202 units (across all models) to clock 36.52% year-on-year growth. 

The announcement follows discussions with the Romanian government on developing a framework to help Ford transition from its existing investment to help maintain the global competitiveness of the Ford Craiova manufacturing operations.

The news follows Ford’s recent commitment to launch five new vehicles to compete in the SUV and crossover space in Europe in the next three years, starting with new Ford Edge in the second quarter of 2016. The automaker expects to surpass 200,000 SUV sales in Europe for the first time in 2016 – a growth of more than 30 percent compared with 2015.