Ford to build second plant in Gujarat

Ford India is getting aggressive in the Indian market and has announced that it will build a second plant in Gujarat comprising of a state-of-the-art vehicle manufacturing facility and an engine plant in Sanand, Gujarat.

Ford which has got a good response from its small car Figo plans to launch 8 new models by 2015. The New Fiesta is one of the eight models which Ford has already launched.

Ford will invest4,000 crore (approximately US$1 billion) and create 5,000 jobs on a 460-acre site which is adjacent to the Tata Nano facility.

Official Press release

As part of its aggressive global expansion, and to meet growing demand in India, Ford Motor Company announced today it will build an integrated manufacturing facility comprising of a state-of-the-art vehicle manufacturing facility and an engine plant in Sanand, Gujarat. Representatives from Ford and the State of Gujarat signed a memorandum of understanding (MoU).

Ford will invest approximately4,000 crore (approximately US$1 billion) in the two facilities, which include stamping, body, paint and assembly operations for vehicle manufacturing, as well as machining and assembly operations for engine manufacturing. The vehicle manufacturing plant will have an initial annual capacity of 240,000 units, and the engine plant will have an initial annual capacity of 270,000 engines. Ford’s investment will also create 5,000 jobs at the new facilities.

The manufacturing operation will be built on a 460-acre site, with adjacent land protected by the local government in order to attract and locate automotive suppliers within close proximity of both plants.

“Namaste Gujarat!” said Joe Hinrichs, president and CEO of Ford Asia Pacific and Africa. “We are delighted to announce that Ford’s newest vehicle manufacturing site will be here in Gujarat.  Ford has very aggressive expansion plans in India and in Asia Pacific and Africa, and these two new plants will be important in realizing our growth strategy here in one of the most dynamic regions in the world.”

Ford selected Gujarat because of its pro-business environment, infrastructure, access to ports in northwestern India and skilled workforce. The new facilities will allow quick access from operations at the new manufacturing site to the heartland of the critical north and western India regions, where the largest share of the country’s passenger car industry exists.

Construction of both plants will begin later this year, with the first vehicle and engine scheduled to come off the line in 2014. In 2010, Ford announced it would bring eight new vehicles to India by mid-decade. Ford currently has a vehicle manufacturing plant in Tamil Nadu and is expanding its engine plant there.

At a ceremony held in Gandhinagar, the Industry Secretary of the State of Gujarat, Mr. M Sahu, and Michael Boneham, Ford India’s president and managing director, signed the MoU, in the presence of the Honorable Chief Minister of Gujarat, Mr. Narendra Modi, and Joe Hinrichs.

“This is an investment in the future of Ford globally,” said Hinrichs. “These new state-of-the-art facilities will help us reach the goal of increasing worldwide sales by nearly 50 percent by mid-decade to about 8 million vehicles per year. We are aggressively expanding in markets around the world that have the most growth potential, in order to offer more of the fuel-efficient, high-quality vehicles from our global portfolio that customers in markets like India want and value.”

Ford is bringing more than 50 new vehicles and powertrains to its Asia Pacific and Africa region by mid-decade. Sixty to seventy percent of Ford’s growth is expected to come from this region over the next ten years.

“India is a dynamic and vitally important market for Ford,” said Boneham. “As part of our strategy in India, we will continue to expand vehicle and engine production, grow our dealer network, and continue to enhance our team of local talent, all while recognizing the strengths and value of our suppliers.”

“This investment reinforces our long term commitment to India. The success of our world-class facilities in Chennai and the passion of the hard working men and women of Ford India paved the way for additional growth and investment here. Just as in Tamil Nadu, where Ford works hard to be a good corporate citizen, we look forward to doing the same in Sanand, Gujarat,” added Boneham.

Honorable Chief Minister Mr. Narendra Modi stated in his address, “Entry of Ford Motor Company in the State will further strengthen the capability of Gujarat as an auto hub.” He emphasized, true to the spirit of Gujarat, “I further assure Ford the wholehearted support and hand-holding of my government for the speedy implementation of the project.”

This additional investment brings Ford’s total investment in India to approximately US$2 billion.  Currently Ford in India employs more than 10,000 hard-working, dedicated men and women across its manufacturing, global business services and IT operations.

The launch of the Figo in 2010 transformed Ford in India. The company has sold more than 100,000 Figos in just 15 months, and is exporting them to growth markets from its manufacturing facility in Chennai. Figo, which exemplifies best-in-class quality and value for money, helped fuel Ford’s success in India by tripling its sales in 2010 and earning 20 major automotive awards, including the country’s most prestigious automotive award: 2011 Indian Car of the Year.

Earlier this month Ford India launched the All-New global Fiesta, continuing to expand its portfolio of high-quality, fuel-efficient vehicles with smart and segment-first technologies.

Ford recently announced an investment of US$72 million by 2012 to expand its powertrain facility in Chennai to further support its expansion in India. Ford India has also recently increased its sales and service network to 190 outlets across 108 cities, of which more than 40 percent are located in secondary markets. In 2011, Ford has continued to grow aggressively by opening one service or sales outlet every week.