March 4, 2021

Ford to Increase Its Plant Capacity in India

NEW DELHI — The Ford Motor Company plans to invest almost $1 billion in northwest India, building factories to make nearly a quarter of a million cars a year, company executives said on Wednesday.

The investment is Ford’s latest push into fast-growing markets in Asia and Africa, where it lags other big automakers.

The company’s chief executive, Alan R. Mulally, said this year that Ford aimed to get a third of its sales from these two regions, about double what it was getting now. Ford has been adding factories, rolling out new models and opening dealerships in countries including South Africa and Thailand.

India, where passenger car sales grew 29 percent in the last fiscal year, to 2.5 million, is expected to become a critical market over the next decade, Ford executives said Wednesday. Ford expects a “dramatic spike up in India” by the middle of the decade as incomes increase, said Joe Hinrichs, president of Ford Asia Pacific and Africa, during a meeting with reporters in Delhi.

Ford is investing in the state of Gujarat, whose chief minister, Narendra Modi, has drawn international attention for his business-friendly attitude. But Mr. Modi, a longtime Hindu nationalist, also remains one of India’s most polarizing politicians because of allegations that he played a role in 2002 riots that left more than 1,000 dead, mostly Muslims.

Ford executives said they had chosen Gujarat because of its probusiness environment and because it had ports, which could allow the company to export from India in the future and to diversify from its existing Indian operations in the south.

“These are long-term investments,” said Mr. Hinrichs. Ford is “trying to make the right long-term business decisions for multidecade investments, which will last far beyond any one political career.”

Ford plans to build two new factories in Sanand, Gujarat, by 2014 that will employ 5,000 and have the capacity to assemble 240,000 cars and build 270,000 engines. Ford already has operations in the southeastern state of Tamil Nadu that employ 5,000 in manufacturing and 5,000 in back-office work and information technology.

Growth in India’s booming passenger car market may outstrip that of China’s this year, as the Chinese government tries to slow its sector’s growth, removing subsidies and incentives for new car purchases.

Ford is not alone in channeling more capital into India. The Toyota Motor Corporation said on Wednesday that it would invest an additional $220 million in the country, to double production capacity to 310,000 units by 2013.

Ford’s performance in India has lagged its performance in other markets. The company sells only 3 percent of all passenger cars in India, compared, for example, with 10 percent of Brazil’s cars.

Ford was the only Detroit automaker to emerge from the 2009 recession without going into bankruptcy. And on Tuesday it reported its ninth consecutive quarterly profit, although its rebound was showing signs of slowing.

“Because we came out of the crisis much stronger financially, we now can make long-term investments, and that is what we are doing,” Mr. Hinrichs said.

Article source:

Speak Your Mind