Ford's small EcoSport SUV has been a success in India. But it isn't enough by itself to keep Ford's two big Indian factories running at capacity. Image source: Ford Motor Company 

Ford Motor Company (F -0.31%) CEO Mark Fields has made it clear that boosting the Blue Oval's effort in emerging markets is a "strategic priority." But not all emerging markets have the same priority.

"One of our strategic priorities is building a leadership position in select emerging markets," Fields said at Ford's Investor Day presentation last month. "Select is a really important word here, because it's about where we can win." [Emphasis added.]

Source: Ford Motor Company.

During his presentation, Fields talked up the potential of Russia at some length. But in India, where Ford has a substantial manufacturing footprint, Fields' view is more... nuanced. 

Ford is still trying to turn a lemon into lemonade in India

As part of a huge push into Asia, Ford announced in 2011 that it would build two big manufacturing sites in India. At the time, then-CEO Alan Mulally saw India as a market with potential to boom like China. Ford was late to China, and Mulally -- sensibly, I thought at the time -- didn't want to make the same mistake twice.

But the sales growth that Ford expected didn't materialize. In 2013, with one of those two new factories up and running and construction well along on the second, it announced a change in strategy: Ford said it would now use India as an export hub, a low-cost manufacturing base that would supply vehicles to other Asian markets.

The problem was that Ford was building the manufacturing capacity to make 440,000 vehicles a year in a market that was buying fewer than 150,000 of them. The hope was that exports would make up the difference and keep those new Ford factories running profitably. (As a general rule of thumb, auto factories need to run at about 80% of capacity to break even, where "capacity" is defined as two shifts of workers, five days a week. Anything less and the factory is probably losing money.)

As Fields said last month, that hasn't quite worked out. "In India, we've set up India as an export base for small vehicles. However, our market performance and our financial performance has not met our expectations, so we are in the process of reevaluating our strategy and our business model for India." 

Fields dropped an intriguing hint as to what that might mean. "Our new mobility business could be a factor that plays in there. That's why you saw us about a month ago take an equity position in Zoomcar, which is the largest car sharing service in India."

Ford is willing to walk away from markets where profits are elusive 

"What's clear to us on emerging markets, just like I mentioned on our vehicle lines, we have to convince ourselves that there is a path to sustained profitability. And if there isn't, we make decisions," Fields said.  [Emphasis added.]

Fields sees such a path in Russia. But in India, it sounds like Ford might be reconsidering. As Fields noted, the Blue Oval under his leadership has cut its losses by leaving unprofitable markets like Japan and Indonesia. If it can't see a path to profitability in India, it might well do the same there -- despite its big investments. 

For shareholders, that would be a tough pill to swallow. But it might be the right medicine for Ford's bottom line.