US carmaker Ford is to go ahead with its planned $500 million (£286.3 million) investment in India despite the financial crisis and a slowing local market.

"Our investment decisions are long-term," Michael Boneham, managing director of Ford in India, said.

"As difficult as the short term is, we continue with a high degree of confidence in the medium and longer-term future of the market in India."

Ford is building factories in India and Thailand to offset falling US sales.

The company said in January that it would begin selling a small car in India in two years and set up an engine factory at Chennai. Since then, Indian car sales have slumped because of high interest rates.

Ford's car sales in India fell 27% to 12,412 between April and September while the overall market saw a sales rise of 5.3% to 600,385 - less than half the pace of last year.

Ford, along with other Detroit firms, is trying to accelerate the release of $25 billion in Washington loans designed to help it retool factories to produce more fuel-efficient cars.