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Old 19th July 2012, 10:17   #1
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Default Amidst downturn, Ford India expands engine plant capacity

Although hit by the market slump like all auto manufacturers, Ford India clearly has expansion plans set in its sight.

This after it announced the completion of a new facility in its existing Maraimalinagar engine plant. The plant's production capacity will now increase by 36% from 2.5 lakh units to 3.4 lakh units annually.

This is an interesting development considering the current gloom over the auto market. Ford has seen their sales figure decline by a third between January and June this year. There are several reasons behind the move:

Expansion

According to the company, customers are discouraged by waiting periods. The additional capacity is aimed at bringing down the waiting period for any Ford to less than two weeks.

The increased production will also provide engines for the recently repositioned Classic Titanium sedan, and the upcoming Ecosport SUV.

Export

In light of the recent devaluation of the rupee, export has become a viable option for most car manufacturers, and Ford is jumping on the bandwagon as well. They will export almost 40% of the engines produced from this plant to markets such as South Africa, Thailand and Taiwan.

The facility's expansion is at an investment of USD 72 million. Ford wants to strengthen its exports of small displacement engines like the 1.6 TiVCT, 1.4 HC and Duratorq engines.

Plant details

The new facility was completed in just over 14 months. As per market demands, the bulk of its production will focus on diesel engines, with over 80,000 additional units to be produced annually.

This is Fords first facility with a single flexible production line that manufactures both petrol and diesel engines. The plant produces 17 engine variants - 12 Duratec petrol variants and five Duratorq diesel variants.

According to Michael Boneham, MD Ford India, their Gujarat facility will also get a flexible engine plant soon with production capacity of 2.7 lakh units annually.

Amidst downturn, Ford India expands engine plant capacity-ford1.jpg
Amidst downturn, Ford India expands engine plant capacity-ford2.jpg
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Old 19th July 2012, 10:28   #2
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Default Re: Amidst downturn, Ford India expands engine plant capacity

A strategy very similar to that of Nissan, who have also very recently lead a production expansion drive. Bring it on I say. This will reduce import of automotive parts from our south east asian counter parts and increase exports., thus doing its part to aid India's GDP figures and providing employment.
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Old 19th July 2012, 10:30   #3
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Smile Re: Amidst downturn, Ford India expands engine plant capacity

This must be inline to Ford India's plans to launch the Eco sport SUV in near future and hopefully the Fiesta hatch.

Was suprised by the company statement that customers are discouraged by waiting periods. On what models is the company referring to?
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Old 19th July 2012, 10:55   #4
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Default Re: Amidst downturn, Ford India expands engine plant capacity

Ford has waiting periods on the Figo diesel in some areas. In Orissa, Figo had a waiting period of 2weeks to 2 months depending on the colour, a few months back. I am not sure about the present scenario.
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Old 19th July 2012, 11:25   #5
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Default Re: Amidst downturn, Ford India expands engine plant capacity

Quote:
Originally Posted by ashis89 View Post
In Orissa, Figo had a waiting period of 2weeks to 2 months depending on the colour, a few months back. I am not sure about the present scenario.
That's because of cut in production levels and not because of increase in demand.


Quote:
Ford, General Motors and Fiat India have all cut production by up to 25% last month.
Auto makers cut production as inventories pile up - CNBC-TV18

Last edited by Daewood : 19th July 2012 at 11:28.
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Old 19th July 2012, 11:41   #6
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Default Re: Amidst downturn, Ford India expands engine plant capacity

The flexible manufacturing that lets them manufacture both petrol and diesel engines in the same plant is the first of its kind, according to the Ford India MD. Gem of an idea considering that the demand for diesel is going north but may have a totally opposite trend if the govt. brings in a new tax plan or decontrol of diesel prices.
By the look of things, Ford is betting big time on India.
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Old 19th July 2012, 11:47   #7
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Default Re: Amidst downturn, Ford India expands engine plant capacity

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Originally Posted by Daewood View Post
That's because of cut in production levels and not because of increase in demand.


Auto makers cut production as inventories pile up - CNBC-TV18
There were no production cuts 6 months back when I was enquiring about the Figo and the silver colour Figo D had a 2 month waiting period.
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Old 19th July 2012, 13:02   #8
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Default Re: Amidst downturn, Ford India expands engine plant capacity

Hyundai India should take a leaf out of it. Ford sales are dismal, but even Hyundai's aren't that good, except the cars where they have diesel models in portfolio (i20, Verna).

If Ford can set up a Diesel Plant, why can't Hyundai, they are cash rich & small cars with diesel would actually mean much more sales for the company, but, only if they could learn fast from the evolving market.
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Old 19th July 2012, 13:06   #9
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Default Re: Amidst downturn, Ford India expands engine plant capacity

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Originally Posted by CARDEEP View Post
If Ford can set up a Diesel Plant, why can't Hyundai, they are cash rich & small cars with diesel would actually mean much more sales for the company, but, only if they could learn fast from the evolving market.
Hyundai doesn't export diesel engines from the India plant, wheras Ford does export the majority of the diesel engines produced here.
That's what necessitated the expansion of the diesel engine plant by Ford.

Quote:
Originally Posted by ashis89 View Post
There were no production cuts 6 months back
Then i guess it was during december or january.
Car manufacturers stop production during the end of the calendar year to avoid pile up of an year old model. So some fast moving colors get waiting periods. Last december there was no stock of White Punto with many dealers, which is otherwise available within 2 weeks.

Last edited by Daewood : 19th July 2012 at 13:10.
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Old 19th July 2012, 13:45   #10
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Default Re: Amidst downturn, Ford India expands engine plant capacity

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Originally Posted by Daewood View Post
Hyundai doesn't export diesel engines from the India plant, wheras Ford does export the majority of the diesel engines produced here.
That's what necessitated the expansion of the diesel engine plant by Ford.
I have already mentioned in my previous post that they could use the plant to manufacture smaller diesels engines for i10, Eon, which could bring them good numbers. Moreover, they are exporting petrol i10's, etc to from their Sriperembadur plant. In this way they could be lesser dependent on Turkish plant for diesel small cars.
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Old 19th July 2012, 15:00   #11
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Default Re: Amidst downturn, Ford India expands engine plant capacity

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Originally Posted by Daewood View Post

Then i guess it was during december or january.
Car manufacturers stop production during the end of the calendar year to avoid pile up of an year old model. So some fast moving colors get waiting periods. Last december there was no stock of White Punto with many dealers, which is otherwise available within 2 weeks.
I am talking about Oct'11 and April '12. During both this period the Figo D had a waiting period ranging between 1-2 months.
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Old 19th July 2012, 15:29   #12
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Quote:
Originally Posted by ashis89

There were no production cuts 6 months back when I was enquiring about the Figo and the silver colour Figo D had a 2 month waiting period.
While booking my Red Figo in Bangalore during June 2012, only one dealer had one Red in his stock and other three dealers asked me to wait for 2 weeks.
Diesel Swift, Figo & i20s are actually selling like hot cakes.
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Old 19th July 2012, 15:36   #13
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Default Re: Amidst downturn, Ford India expands engine plant capacity

About 18-24 months back most surveys had informed Automotive companies that the next 36-48 months are going to be a high growth period for them. Almost all car manufacturers/vendors had invested into green field projects/expansions. This project could have been 3-4 years in the making so dont read too much into it.
Michelin similarly was supposed to setup a plant in India. They got all their Vendors down to India. The plant is still in limbo and what I heard last was that it would be making commercial tyres only to begin with.
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Old 20th July 2012, 07:50   #14
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Default Re: Amidst downturn, Ford India expands engine plant capacity

Smart move, this is the right time to make right investments for future. Downturn will never be endless and if right moves are made in the downturn time to get ready for times when it gets over it will rewarding. Most good corporates make value-for-money investments in downturn to get ready for boom time post that.

This will bring in surplus capacity for Ford and will be ready by the time economy recovers.

Last edited by mayankjha1806 : 20th July 2012 at 07:51.
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Old 6th September 2012, 21:11   #15
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Default Re: Amidst downturn, Ford India expands engine plant capacity

Ford will export Indian-built engines to Europe.

Ford Motor Co. plans to ship engines from India to Europe and other markets, as the automaker tries to boost exports to use its expanding Indian production capacity.
It would be the first time Ford has shipped Indian-built engines to Europe. Ford will have the capacity to build 450,000 cars and 600,000 engines in India by 2015
Quote:
Ford has invested more than $2 billion to build factories in India, but it has not so far won major market share from competitors such as Hyundai Motor Co. and Maruti Suzuki India, which dominate the small car segment.
http://www.autonews.com/article/2012...#ixzz25hkuzw8f
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