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Ford plans to hike dealerships by 50%

In a bid to increase presence across the country, Ford India Limited, or FIL, is hiking its dealership and service outlet network by 50 per cent from 40 to 60 by the end of 2000 calendar year.

In addition, the company is also planning to despatch the 'Ikoncept', the 1.6 GT concept car based on Ikon and designed by automobile re-designer Dilip Chabbria, to its dealerships for gathering customer perception, senior company officials said.

Regarding Ford's plan to hike the number of dealerships, the officials said, "Besides setting up new dealerships, the company is also looking at setting up new service outlets with the existing dealers in a hub and spoke arrangement."

Under this, an existing dealer in a city would be allowed to set up an additional sales and service outlet in another part of the same city.

These steps are being initiated to keep pace with the growing demand for Ikon. The company has been selling an average of 2,000 units per month since its launch in December 1999. It has already ramped up production of the Ikon to 80 units a day and would be hiking it further to 100 units a day by the end of this month.

The car is currently available in 1.3 litre and 1.6 litre petrol versions and 1.8 litre diesel version. The company has recently launched a sporty version of the car.

Though the 1.6 GT concept car was unveiled at the recently held Auto Expo 2000, the company is yet to state a time-frame for launching the car in India. Positioned in the top end of the Ikon segment, the car is fitted with a global positioning system-based navigational system and Alpine Entertainment with VCD and Pop-Up TV.

Meanwhile, the company has announced that cine stars like current heart-throb Hritik Roshan and evergreen star Dev Anand, and chairman of the Securities and Exchange Board of India, or SEBI, D R Mehta have joined the list of Ikon customers.

The list of Ikon buyers also include several corporate houses like Reliance Industries, Siemens, Godrej Soaps, Star TV, PricewaterhouseCoopers, Hindustan Lever Limited, Wipro, ABB, ICICI and IDBI.

In order to further hike capacities at units at Maraimalai Nagar plant near Madras, Ford Motor Company of the United States will infuse Rs 500 million worth of fresh equity into Ford India by the end of 2000 calendar year, hiking its stake in the venture to 85 per cent.

The fresh equity infusion will be used for building up capacities and to meet working capital needs. Mahindra and Mahindra will hold the remaining 15 per cent stake in the venture.

Ford Us has already got the Foreign Investment Promotion Board, or FIPB, approval to hike its holding in Ford India to 92 per cent. But the company is in no hurry to exercise the same. "We will bring in additional funds as and when required. This year we will be bringing in Rs 500 million and more money would come in when the need arises."

The company has also tied up loans worth Rs 10 billion from various banks and financial institutions, but has not utilised it. "We will be using some of this loan as well."

In addition, the company had last year placed Rs 1.75 billion worth of debentures through the Deutsche Bank. The debenture programme was given a AAA rating by Duffs and Phelps and Credit Rating and Investment Services India Limited, or CRISIL.

Ford India, previously known as Mahindra Ford India Limited, was floated as a 50-50 venture between Ford US and Mahindra and Mahindra. But inability on part of the Indian promoter to put in more equity and Mahindra's desire to concentrate on its dream project -- 'Project Scorpio' -- resulted in Ford hiking its stake in the venture.

Ford India had recently also announced its entry into the used-car market with the launch of Ford Assured, an initiative under which Ford will buy, recondition and sell used cars of different makes.

The initiative would initially be launched in Bangalore, Madras, Coimbatore, Ludhiana and Pune.

UNI

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