Ford India invests in small car segment

Chennai: Ford India Pvt Ltd has announced a Rs 2,000-crore ($500 million) expansion plan to set up a small car production facility and an engine manufacturing unit.

At a press conference here on Tuesday, Ford India’s Managing Director, Mr Arvind Mathew, said that Ford’s investment in India would double to more than $875 million over the next three years. The expanded facilities, which are to start production in two years, would come up adjacent to Ford’s existing car plant at Maraimalai Nagar near Chennai. The details of the funding are being worked out.

New product segment

The expansion would see Ford launch a small car, a new product segment for Ford in India. The car plant capacity would double to two lakh vehicles a year by 2010. However, he declined to share further details about the new product.

The engine manufacturing facility with a capacity of about 2.5 lakh units would produce petrol and diesel versions. It would meet Ford’s local requirement and those of its car plants in the Asia-Pacific and Africa region. This would be Ford’s first engine plant with diesel engine production capability outside Europe, he said.

On Ford India sourcing engines from Hindustan Motors, he said their Pithampur plant would continue to build Ford’s petrol engines and transmissions. With the new engine plant in place, Hindustan Motors would meet the increased requirement for transmissions. Ford India will source transmissions from them for its engines meant for the domestic market.

Mr Michael Boneham, Vice President – Operations, Ford India, said the first of the diesel engines would move off the production lines in April 2008. These would be for the Fusion and Fiesta models for the local markets.

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.