Ford to invest $500 Mn for expanding India operations

Ford to invest $500 Mn for expanding India operations

Thursday, 20 March 2008, 04:53 Hrs
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Bangalore: Global auto major Ford Motor Company (FMC) will invest an additional $500 million over the next two years to expand its Indian operations for manufacturing small car and components for domestic and overseas markets, a top company official said here Wednesday.

"We have lined up $500 million for our expansion plans in India. By 2010, we will ramp up our installed capacity to 250,000 units per annum from 100,000 units currently for rolling out compact cars, new versions of engines and critical components for domestic and overseas consumption," Ford India vice-president Scott McCormack told reporters here.

Ford's Indian subsidiary has invested about $400 million over the last decade for setting up an integrated manufacturing facility at Maraimalai nagar near Chennai in Tamil Nadu to produce a range of models in the high-end (A2 and A3) segment such as Ikon, Fusion, Fiesta and Endeavour.

"Though our sales in calendar year 2007 were marginally higher at 38,000 units as against 36,000 units in 2006, we have been able to increase capacity utilisation by stepping up exports to South Africa, Middle East and some European countries. Our Chennai plant is also emerging as a major sourcing hub for auto components and assembling kits to FMC's operations worldwide," McCormack said on the sidelines of a company event.

In spite of slow down in sales due to high interest rates, softness in uptake and cyclical trends during the last two quarters after a high growth rate in the previous year (2006), an unfazed Ford India is betting on a turnaround this year, with the launch of Fusion Plus last week and Endeavour SUV (sports utility vehicle) last month.

"The growth has been more or less flat last year due to some factors, which were cyclical in nature. Despite stiff competition in the luxury segment and lower demand, our sales were marginally higher than in 2006. In view of a positive response to our new variants, we are confident of overcoming the sluggish growth to consolidate our presence," McCormack noted.

With small and compact cars accounting for over 70-80 percent of total passengers vehicles in the Indian auto market, Ford India has decided to introduce its version by 2010 and focus on volume production to increase its market share.

"We have not decided which of the small car model will be introduced in the Indian market, which is price sensitive and customer expectations are high in terms features, mileage and after-sales support. Our expansion plans include widening dealer network and support services," McCormack asserted.

In a related development, Ford India teamed up with Autocar India to set a new mileage record of 33.4km per litre under real road conditions by driving Fiesta's Durotorq TDCi (diesel) from Bangalore to Mumbai without refuelling.

"Recording an average speed of 46.5km per hour, Fiesta took 24 hours and 20 minutes to cover a distance of 997 km through different terrain, patches of bad roads, highway traffic jams and ghat sections between Pune and Mumbai," Autocar editor Hormazd Sorabjee recalled.

A team of experts from Ernst and Young and Motor Sports Association of India supervised the marathon and audited the mileage to demonstrate the fuel efficiency of the sedan.
Source: IANS
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