India a growth story for Ford: Michael Boneham

Work on the proposed $1-billion greenfield plant at Sanand in Gujarat ‘is on track'

February 16, 2012 10:28 pm | Updated February 17, 2012 04:31 pm IST - CHENNAI:

Reiterating that ‘India is a growth story' for the American auto major, Michael Boneham, President and Managing Director of Ford India Private Ltd., has asserted that “we are not changing either our perspective on India or investment plan for the country'' in the wake of the raging debate over the proposed free trade agreement (FTA) with the European Union (EU) and the controversy surrounding the demand for an additional excise duty on diesel cars.

In an interaction with this correspondent here on Thursday, Mr. Boneham said, “globally we have taken a position that the FTA is right and appropriate.'' However, he admitted, that the FTA posed certain challenges in developing countries. “But, we are not changing our investment decisions for India,'' he pointed out. In this context, he quoted founder Henry Ford, who had said, “build vehicles where they sell.''

Referring to the demand for taxing diesel cars, Mr. Boneham said, “Why penalise an industry to support another.'' Should the diesel cars be taxed, it would definitely have an impact. “To what extent will it impact? I don't know,'' he added. The Ford India chief asserted that diesel cars were fuel efficient. Diesel cars, he insisted, had only positive fall-outs from environment and economics points of view. Given the country's dependence on imports for oil and considering the current global climate, it would be sort of imprudent to drive a shift towards petrol cars through tax-led discouragement to diesel cars (since diesel is subsidised).

According to a SIAM study, he said, the diesel use by private passenger cars comprised just about one per cent of the total diesel demand in the country. In any case, he said, a barrel of crude upon conversion would fetch more diesel than petrol. As a consequence, any tax-led drive towards petrol cars would take the oil bill up further, he pointed out.

He felt that there was quite a misunderstanding about diesel cars at assorted levels. “We need to talk with data,'' he added.

Ford India had a 70:30 production between diesel and petrol vehicles. Mr. Boneham claimed that the engine plant was flexible and capable of re-adjusting the product-mix.

Mr. Boneham said work on the proposed $1 billion greenfield plant at Sanand in Gujarat ‘is on track'.

Ford, he said, had already committed a further investment of $72 million to expand its existing power train facility near Chennai. It announced an additional investment of $142 million there to support the manufacture of soon-to-be-launched EcoSport. All these, would take Ford's total investment to $2 billion in its Maraimalainagar facility near here.

Expressing his happiness over Ford's growth in India thus far, Mr. Boneham stressed the need for stability not just in policy matters but also in labour relation. He was confident that the country's monetary authority, the RBI, would take appropriate action on the rate front sooner than later.

Record opening

Mr. Boneham inaugurated a brand new 3S and Service facility at MPL Ford in Chennai. MPL Ford is the first Ford dealer in the country. According to S. Ravindranathan, Dealer Principal, it has opened a dealership in Kochi too. In fact, Ford India opened a record 45 sales and service outlets in 35 locations across the country on Thursday.

Since the launch of Figo in March, 2010, Ford had been adding one sales outlet to its network every 10 days, Mr. Boneham said.

He insisted that Ford was committed to grow the sales network this way in the next two years.

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