Engine expansion puts Ford on fast track in India

CHENNAI, July 18, 2012

Ford India has cleared the roadblocks for a larger share and greater growth by quickly upping the engine capacity, which has been a key `sales limiting' factor for it thus far.



This "limiting factor" has forced Ford India to keep the customers waiting. The first-half of the current calendar especially saw buyers wait over 90 days to get delivery of Ford cars. With the extra engine capacity going on stream, the waiting period will drastically come down to just a fortnight.



So much so, the engine capacity expansion has emboldened Ford to launch on Monday the top-end 'Titanium' variant of the Classic sedan in both diesel and petrol versions. Further, the engine capacity expansion fits perfectly well with the Ford plan to launch soon the SUV (sports utility vehicle) 'Ecosport'. Plans are also afoot to export 'Ecosport' from India.



Addressing a press conference at the Maraimalainagar facility here on Tuesday, Michael Boneham, Managing Director, asserted that notwithstanding the slowdown in the economy, the growth story of India was on track. He insisted that Ford focussed on long-term and that it was confident of its investment in India.



The engine capacity has gone up to 3.40 lakh units per annum. According to Mr. Boneham, the unique thing about this engine capacity expansion was that it was flexible to make both petrol and diesel ones. The facility was the first Ford plant in the world with single flexible production line manufacturing petrol and diesel engines, he pointed out.



"With this, we are well poised to move quickly," he added.



Ford began producing petrol engines with a plant capacity of 80,000 units in 2008. Subsequently, it scaled it up to 2.60 lakh units in 2010. With an additional investment of $72 million, the capacity has now been increased by 80,000 to 3.40 lakh units a year. Today, the Maraimalinagar facility is churning out 17 engine variants.



According to Mr. Boneham, Ford's earlier $500 million investment went to increase engine capacity to 2.60 lakh units and car output to 2 lakh units.



The $72 million investment was on top of this to up engine capacity, he added.



The Managing Director said nearly 40 per cent of the engines produced at the facility were exported. Nearly 80 per cent of the diesel engines produced by it were for the domestic market, and 90 per cent of the petrol engines for the overseas markets.



Ford just rolled out from its assembly line 4,00,000 engine from its facility.



Fielding a range of questions, Mr. Boneham said the upcoming greenfield venture in Gujarat would also house a flexible engine plant. The Gujarat facility, according to him, would have an engine plant with a capacity of 2.70 lakh units a year. This would see the total engine capacity of Ford in India go up to 6.10 lakh units by 2014.



To a query, he said engine exports, in a way, helped Ford India to hedge itself against the impact of rupee depreciation on its imports of critical components. To a question on move to tax diesel cars, he said "taxing one for providing subsidy to another is not advisable." He insisted that it was important to bring the confidence back to customers and companies alike.
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