Joe Hinrichs, Ford's president for the Asia Pacific region and Africa, said the company expects an opportunity to expand capacity in India as the market grows.

Ford, which had earlier announced a $500 million investment for India, will need fresh investments if it expands capacity.

The company is planning to introduce eight new vehicles in India by the middle of the decade and will start exporting its best-selling compact Figo cars from India to 50 new markets next year, including Mexico, north African countries and the United Arab Emirates.

"We are making a bigger bet in India," Hinrichs said.

The Indian car unit of Honda will launch a compact car in the second half of 2011 and will initially roll it out of its facility near New Delhi.

Honda Siel, which makes and sells cars such as the Jazz hatchback and Honda City sedan, is expecting double-digit sales growth this month, marketing head Jnaneswar Sen said.