The U.S. car maker Ford has zeroed in on Gujarat to set up a second plant in India. Post-liberalisation, India has always held huge opportunity for many a multinational. The expanding economy has only increased the attraction to the Indian market. Post-Figo (small car) launch, Ford has become a visibly aggressive player in the Indian market. There was intense speculation that Ford would go in for a second plant sooner than later. Coming as it did, the announcement of second greenfield project of Ford in India should surprise none.

A new project in a different location, according to industry watchers, makes lot of economic sense. It is seen as a well-thought out strategy to spread risk, even as Ford tries to exploit the still under-explored Indian market. Though Chennai has emerged as an automobile hub with the entry of Hyundai, Ford, BMW, Nissan-Renault and other ancillaries, the industrial relation (HR) scene has come under stress for assorted reasons. This has indeed caused anxiety among these firms. When many arrive at the expansion stage, they wonder if it is wiser to put all eggs in one basket.

De-risk strategy

Given this, the Ford is right in going in for a de-risk strategy vis-a-vis its India aspirations. America also has huge business interest in this region. Some of the top U.S. companies in and around Chennai are: , Ford, Prolec GE, Caterpillar, Dell, Delphi, Visteon, TRW, Wabco, John Deere, Motorola and Moser Baer. Tamil Nadu has over 100 American companies operating across sectors such as IT, automotive and auto components, heavy engineering, telecom and manufacturing.

The Ford's decision to go to Gujarat is also read as the beginning of a carefully constructed exercise to spread out by the America Inc to play safe in a large market such as India. Besides the HR scene, the power situation in Tamil Nadu is anything but bright at the moment.

The Gujarat move has a marketing angle to it. For, this will take Ford closer to major car-buying markets in India. The arrival of Ford to Gujarat is indeed a major shot in the arm for the Chief Minister, Mr. Modi.

Not long ago, he pulled a coup of sort when he convinced the Tatas to relocate the Nano plant to Gujarat after it had hit roadblocks in West Bengal in the wake of political opposition to the project. With Tatas and Ford moving to Modi land, many auto component units are bound to make a beeline for Gujarat. Will the entry of Ford redraw the business landscape of Gujarat?

Keywords: Ford Motors