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Ford Motor to pump Rs 10 billion into India

Ford Motor Company of the United States is facilitating infusion of around Rs 10 billion into India through its 80-odd global vendors who are setting up bases in the country for servicing the C-195 Fiesta-based car.

Of this, around Rs 6.5 billion will be brought in by Visteon, a wholly-owned subsidiary of Ford India, while the remaining Rs 3.5 billion would be infused by other component manufacturers, Phil Spender, managing director of Ford India Limited, the Indian subsidiary of Ford said in Madras.

Besides, Ford Credit would also be expanding its portfolio in the country to include financing the new car, which would be rolled out by the year-end.

On the strength of this vendor base, Ford India expects to roll out the car with an initial local content level of 70 per cent, which would be raised to 80 per cent in the first year.

Visteon, he said, would be supplying the entire instrument panel for the new car.

This is part of Ford's strategy to get its set of global vendors to India to maintain the quality standards of its vehicles. The company is setting up a special supplier park at its plant site here for vendors.

Ford India is working towards commencing exports of its next offering, code-named C-195, within 18 months of starting production this year-end.

Trial production of the car, based on the Fiesta platform, would commence in July with pre-production commencing immediately, Spender said at the inauguration of the company's new manufacturing facility in Madras.

On the export front, Latin America has been shortlisted as one of the destinations for the new car, which would be rolled out only in the three-box version.

''We are looking at exporting both components and completely built units from the new plant. Although an exact timeframe for the same has not been fixed, we are targeting at starting exports of the made-in-India cars within 18 months of commencing production,'' Spender said. India might also be used as a production and export base for the car.

He further stated that in spite of the new plant being commissioned, production of escort would not be shifted out of Mahindra and Mahindra's Nashik plant.

Regarding the C-195, Spender said the positioning and pricing of the new model is yet to the finalised. ''We are working on it.It will a slightly smaller car than the Escort but much more affordable.''

In the first year of operation, around 25,000 units of the car would be produced.

''Our plans for India are well conceived. We are not over-optimistic and we expect growth to be slow but steady,'' he added.

Regarding the scaling down of sales targets for the Ford Escort, Spender said these were temporary phases.''We are here for a long haul and do intend to make profits,'' he said but declined to specify any period for achieving break-even.

On the Indian plant, Spender said it has been designed to be flexible enough to adjust to a range of other models which are likely to be rolled on to the Indian roads in future.

Ford Motor Company is also looking at introducing the C-195 in a host of other nations.

Earlier in the day, Tamil Nadu chief minister M Karunanidhi inaugurated the Rs 17 billion integrated manufacturing facility of Ford India Limited at suburban Maraimalai Nagar for the new car C-195.

The plant also sets global standards in automobile manufacturing through infusion of world's leading technology and process, fulfilling over 70 per cent indigenisation in the manufacturing process at the time of commissioning.

Ford India has also set up a special supplier park at the site and two Visteon facilities are already operational within the campus.

The plant supports a manufacturing capacity of 100,000 units per annum at full capacity.

Meanwhile, utility vehicle major M&M has decided to buy back the 42 per cent stake it had offloaded in Mahindra Ford India Limited in favour of its partner Ford Motor Company before 2001.

M&M's managing director Anand Mahindra said the company's buyback clause with the US major does not set a time frame for purchasing back the equity in MFIL, now re-christened Ford India Limited.

''It is based on mutual understanding. We wanted to concentrate on our Scorpio project and decided to freeze further investments in our joint venture. We will buyback the equity, but that is not going to happen before 2001,'' Mahindra said. He also refused to comment on the amount which M&M will have to pay for buying back the stake.

M&M, he said, is all progressing fast with its Scorpio project and the first model would hit the country's streets in 2001. ''That will also be the time when we can think of buying back the stake.''

MFIL was floated as a 50-50 joint venture between M&M and Ford Motor. Recently, the US-based company had received the foreign investment promotion board nod to hike its equity in the venture to 92 per cent.

UNI

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