Ford India Officially Announces Launch of Second Plant in Sanand, Gujarat Following a US$1bn Investment

Ford India officially announced about investing $1bn for building their second engine and vehicle assembly in India. This comes in the wake of the company trying to step up its production to keep up with the increasing demand in the market.

Their assembly plant will be in Gujarat, and will employ 5,000 individuals. This will be the company’s second manufacturing plant in India, following the first plant, which is located in Chennai. We recently announced about the government of Gujarat allocating a 400 acre plot for use to Ford Motors; however there was still no official word from the leading auto company, which was expected to be out today.

Well, the company recently released an official announcement that they have signed a Memorandum of Understanding with the government of Gujarat and will be making an investment of INR 4,000 crores or US$1bn in two facilities that will include body, paint, stamping as well as assembly operations for manufacturing of engines.

The plant will have an annual production capacity of 240,000 units in the initial phase, whereas the engine manufacturing annual capacity in the initial phase will be 270,000 units. The plant is to be built on the 460 acre plot provided by the state of Gujarat. The CEO and president of Ford’s Africa and Asia Pacific division, said Namaste Gujarat! He said that they are delighted on announcing the newest location for the company’s vehicle manufacturing site in Gujarat.

The company has set aggressive growth plans in Africa, Asia Pacific and India, the opening of these 2 new facilities is important for them is realising this strategy for growth in one of the world’s most dynamic regions.

The reason the company selected the state of Gujarat, was because of their pro-business infrastructure, environment, and access to ports as well as skilled workforce. The new plant would allow for quick access to their site from operations to the heartland of India’s critical west and northern regions, which have the largest market for passenger cars in India.

The construction for both of the plant would begin by this year end. This first engine and vehicle is scheduled to roll off the assembly line by 2014. Last year, the company had made an announcement that they would be introducing 8 new products in India by 2015. The company already has a facility in Tamil Nadu and is currently expanding their engine manufacturing plant over there.

At a function held in Gandhinagar, Gujarat’s industry secretary, M. Sahu, and the MD and head of Ford India, Michael Boneham, signed the agreement, in presence of the CM of Gujarat, Narendra Modi, as well as Joe Hinrichs.

Hinrichs said that this investment is that of the global Ford’s future. The new modern facilities will help them in reaching their goal of expanding their sales in the worldwide market by almost 50% by 2015 to around 8mn vehicles per annum. They are also aggressively increasing in worldwide markets, which offer the most potential of growth for offering high quality and fuel efficient models from their global portfolio to their customers in Indian markets along with value.

The company will be bringing in above 50 new powertrains and vehicles to the African and Asia Pacific region by 2015. The company expects around 60 to 70% of their sales to be accounted by this region alone in a period of ten years.

Boneham said that India is an important and dynamic market for them. Following their strategy in India, they will keep on expanding their engine and vehicle production, enhancing their local team and dealer network, while also realising the value and strengths of their suppliers.

Boneham added that this investment would reinforce their long term commitment in India. Their successful modern planaat in Chennai, as well as the passion of their hardworking women and men has resulted in additional investment and growth of Ford in India. Like in Tamil Nadu, where they have strived for being a good corporate citizen, they will do so in Gujarat as well.

Meanwhile, the CM of Gujarat, Narendra Modi, stated that with the entry of this company in the state, it will only further strengthen Gujarat’s capability as a major auto centre. He assured the company the wholehearted hand holding and support of his government in speedily implementing their project.

This investment will bring the company’s total investment in India to around US$2bn approximately. The company currently employs around 10,000 individuals across their IT operations, manufacturing and global business services.

The introduction of the Figo helped to transform the company’s fate in India. Within just 15 months, the company had managed to sell around 1,00,000 Figo cars. They are also exporting this car from their state of the art facilities in Chennai. The car that exemplifies value and quality for money helped boost the success of the company in India by almost tripling their sales last year and bagging 20 leading auto awards, including the 2011 Indian Car of the Year, one of India’s most prestigious car awards.

Earlier in this month, the company also launched their new global Fiesta that continues to increase their portfolio of fuel efficient, smart, high quality cars, and segment leading technology equipped cars. The company had also announced about investing US$72mn by 2012 for expanding their powertrain plant in Chennai. They also increased their sales, service network to around 190 outlets in 108 cities, of which 40% are situated in secondary markets. They have also continued their expansion strategy by launching at least one sales or service outlet every week.

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