Ford Motor to expand India operations

Special Correspondent

To invest $500 m at Maraimalai Nagar facility

Diesel engine

plant in Phase-I

Local sourcing

to be enhanced

CHENNAI: In what is seen as a New Year gift to Tamil Nadu, 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 fresh investment will be primarily used to set up a small car facility, expand the existing production base and establish a fully integrated and flexible engine making plant. With this fresh fund infusion, Ford’s total financial commitment in India has gone up to over $875 million.

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.

Addressing a press conference here on Tuesday, Arvind Mathew, President and Managing Director of Ford India, said the fresh investment “clearly signifies that India has become a priority market in Ford’s regional and global strategy.” He said the small car would take around two years to come out of the Maraimalai Nagar facility. “It (small car) will be a worthy addition to the already successful and robust product-mix that we offer to Indian customers,” he said.

The proposed small car, he said, would be smaller than the Fusion. Since things were at a very early stage, Mr. Mathew declined to hazard any further guess on the small car. To a query, he hinted that the proposed small car would have significant indigenous content.

The move for expansion of the facility should be read in the context of Ford’s desire to expand the product portfolio (including small car) by putting up an additional line. By 2010, he said the Maraimalai Nagar plant would be in a position to churn out two lakh vehicles annually.

The proposed state-of-the-art engine facility would produce both diesel and petrol versions. It would come up adjacent to the vehicle plant. It would have an annual capacity of 2.50 lakh units. The engine unit would go on stream in two years, he said. The diesel engine plant, that was already coming up, would eventually be seamlessly integrated into the proposed state-of-the-art facility, he added.

Mr. Mathew said the new investment would create over 9,000 jobs (1,500 direct and 7,500 indirect). He said Ford India was also working in close co-ordination with its suppliers on systems, processes and designs to meet the expansion-related requirements.

“We will be significantly increasing our local sourcing to meet the requirements of our expanded production,” he added.

Ford India, he said, would focus on human resources development. In this context, he said Ford would provide skill training for the additional workforce.

Mr. Mathew also said that Ford India had appointed Michael Boneham as Vice-President (Operations), and John Lonsdale as Vice-President (Product Development).