The State government and Ford India on Thursday signed a memorandum of understanding to formalise an investment of $500 million to double the production capacity of the company’s plant at Maraimalai Nagar, about 40 km south of Chennai.

The investment will facilitate the increase of the annual capacity to two lakh cars.

The establishment of an engine plant with a capacity of 2.5 lakh is also covered under the expansion plan. Totally, about 1,000 jobs would be generated, according to a State government press release.

M.F. Farooqui, Principal Secretary (Industries), and Michael Boneham, president and managing director of Ford India, signed the MoU at the Secretariat.

Chief Minister M. Karunanidhi, Deputy Chief Minister M.K. Stalin who handles the industry portfolio, president and CEO of Ford Motor Alan Mulally, executive vice-president of Ford Motor (Asia Pacific and Africa) John Parker, U.S. Ambassador to India Timothy J. Roemer, Chief Secretary K.S. Sripathi and U.S Consul General in Chennai Andrew T. Simkin were present.

Set up in 1996, the existing plant has been producing models such as Ikon, Endeavour, Fusion and Fiesta, the government release said.

It employs about 2,100 employees.

Engine plant

Noting that the plant was gearing up for volume production of the Ford Figo next year, a release from the company stated that the construction of the engine plant was well under way. Production will come on stream in 2010.

The new engine production facility would transform Maraimalai Nagar into the regional source for small displacement engines, serving not only the Indian market but also the Asia-Pacific and Africa region.