Ford Motor plans small car for India
Ford Motor plans small car for India
Ford Motor Company has reaffirmed its commitment to India by deciding to invest an additional $500 million (around Rs. 2,000 crore) into its facility at Maraimalai Nagar, near here.
The investment plan will be implemented in phases over the next three years. The first phase of the plan had already commenced and would include the addition of a diesel engine plant at Maraimalai Nagar with an initial annual capacity of 50,000 units.
The first engine is expected to roll off the assembly line in April. These will go into the local production of Fiesta and Fusion vehicles. Ford is also ramping up capacity at its Chennai plant to 200,000 units from the exisiting 100,000 units by 2010, bulk of which will comprise its small car.
While an integrated engine plant will supply for all these cars, the balance 50,000 units will be exported. This is the first time that Ford is making diesel engines outside Europe,” Mathew added. The manufacturing capacity at the Chennai car plant would be doubled to two lakh units a year.
A large portion of the fresh capacity would go towards making a “new small car”. “We will launch a new small car, as a worthy competitor in the segment in two years time, which will coincide with our expanded capacities coming on stream,” he said. Mr Mathew said that Ford’s investment in India is on par with that announced in the last six months in the Asia Pacific region — $510 million in China and $500 million in Thailand.
India is an important hub for Ford in the Asia Pacific. Ford now employs over 4,000 in India and the expansion would mean an additional 1,500 new jobs. There’s no underestimating the importance of the region to Ford.
Parker estimates that Asia, the Pacific and Africa will account for 70% of the growth in demand for passenger cars in the next decade as consumers grow increasingly affluent and automobiles become more affordable. But so far Ford is a laggard. For instance, it sold 42,060 cars in India in 2006, a figure that is expected to slip to about 40,000 in 2007, for a 2.7% market share.
This is Ford’s second big investment in India after the $375 million it pumped in initially to build its factory in Chennai and comes in the wake of similar announcements in Thailand and China.