Ford’s engine plant in Sanand, Gujarat

Ford Motor Company announced that it will build an integrated manufacturing facility comprising of a state-of-the-art vehicle manufacturing facility and an engine plant in Sanand, Gujarat. Ford will have no partner or joint venture going into India, unlike all the car companies that go into China.

Ford will invest 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 facilities 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. According to Ford Unions don’t have a presence in India.

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.

Ford has very aggressive expansion plans in India and in the 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 ports will allow for the export of vehicles to countries like South Africa and the Middle East.

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.

According to John Stoll, Ford Motor Company, the Figo – a smaller version of the Fiesta – is produced in India and retails around $8,000 US dollars. The Figo is in the highest-selling segment of cars in India. Just that one car has given Ford three percent marketshare in India and tripled it’s sales in 2010 and earning 20 major automotive awards, including the country’s most prestigious automotive award: 2011 Indian Car of the Year.

The Figo is usually purchased with cash, it is usually the customer’s first purchase and probably one of the biggest purchases in their life.

“This is an investment in the future of Ford globally,” said Joe Hinrichs, president of Ford Asia Pacific and Africa. “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.

Ford is bringing more than 50 new vehicles and powertrains to it’s the 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.

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 it’s powertrain facility in Chennai to further support it’s an expansion in India. Ford India has also recently increased it’s sales and service network to 190 outlets across 108 cities, of which more than 40 percent are located in secondary markets.

Information: Ford Motor Company and press release