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Old 1st August 2013, 14:16   #1
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Default Ford's global vendors home in on Sanand

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Sanand, a town in Gujarat whose claim to fame was the quick commissioning of Tata Motors's Nano factory, is being developed as an automotive hub. Apart from Tata Motors and its vendors, the other major car maker setting shop at Sanand is Ford Motor Company, also known as FoMoCo. Ford India has begun constructing its 1 Billion USD worth production facility at Sanand.

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The Ford factory, spread across 460 acres in Sanand, will be ready next year, after which it will be able to churn out 240,000 cars and 270,000 engines, each year. The factory will employ a 5,000 strong workforce and Ford has already begun recruiting ITI certificate holders for the new plant.

Generally, big automakers encourage vendors to set shop around the main car/two wheeler factory to allow for quick delivery of autoparts and to streamline production by closely integrating OEM-Vendor operations. A similar strategy is being followed by Ford India, with global vendors such as Visteon Corporation, Magna International, Getrag Systems and Motherson Sumi, setting shop around the Ford factory at Sanand.

According to a report on BusinessStandard, 15 vendors have occupied about 150 acres of land around Ford's Sanand factory. With Ford India giving the vendors a mid-2014 deadline for beginning parts supply, the first batch of Ford cars from Sanand is expected to roll out from early 2015.

The next generation Figo hatchback, due for an early 2014 launch in Brazil, will be the first car to roll out of Ford's Sanand factory. The project, code-named B562, will play host to both a hatchback as well as a compact sedan. While the B562 hatchback is expected to replace the current Ford Figo, the compact sedan will form the replacement to the Ford Classic (Last generation Fiesta sedan).

Once the Sanand factory is on stream, Ford India will be able to produce 440,000 cars and 670,000 engines, each year, from its two factories at Chennai and Sanand. A major chunk of this production is expected to be headed to export markets given the fact that Ford is looking to developing India as its major export hub from Asia, along with Thailand.

Ford has posted a record first-half profit of 4.77 Billion USD from its home operations in the United States and strong growth from the US and Asian markets have helped Ford tide over its loss making European operations. Although Ford is yet to turn out a profit in India, factors such as the country's long term growth potential, the strong showing of products such as the Figo and the EcoSport, and the low cost-high quality manufacturing edge that India delivers, have given the American car maker enough reasons to invest big in the India story.

Image courtesy MukeshAssociates

Last edited by JayPrashanth : 1st August 2013 at 14:23. Reason: News Link Added
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Old 1st August 2013, 14:43   #2
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Default Re: Ford's global vendors home in on Sanand

Thanks for the update.

And to these reasons add the depreciating rupee factor, Ford will have another good reason to increase the exports from India.

Tamilnadu lost a good oppurtunity and investment to Gujarat as initially Ford was keen to have their second plant also in chennai.
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Old 1st August 2013, 20:28   #3
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Default Re: Ford's global vendors home in on Sanand

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Originally Posted by ndinesh View Post
Tamilnadu lost a good oppurtunity and investment.
This plant will act as an export hub for Ford India. The Chennai port is already catering biggies like Hyundai and Nissan. This could be one reason behind Ford's decision to choose Gujarat. Also by choosing Gujarat, Ford has decentralised their production set ups which is another benefit. Also Sanand is is almost central and it will help Ford to reduce the logistics cost. Last but not the least Govt might have given a very attractive freebies.

But the problem that new companies will face could be manpower shortage. Which can be addressed by proper skill development programs.
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Old 2nd August 2013, 12:26   #4
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Default Re: Ford's global vendors home in on Sanand

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Originally Posted by ndinesh View Post
Thanks for the update.

Tamilnadu lost a good opportunity and investment to Gujarat as initially Ford was keen to have their second plant also in chennai.
There are multiple reasons why major manufacturers have factories at different locations.

Most important is from the labor unrest point of view. Even if one unit faces labor issues the second one will be insulated if it is at different location

Companies look at long terms issues rather than get guided by short term benefits. Gujarat that way offers a lot of long term benefits like good infrastructure, pro active power management, ports etc.,

A country of our size needs a few more auto clusters like Sanand
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Old 2nd August 2013, 12:47   #5
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Default Re: Ford's global vendors home in on Sanand

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Originally Posted by MaxTorque View Post
Also by choosing Gujarat, Ford has decentralised their production set ups which is another benefit. Also Sanand is is almost central and it will help Ford to reduce the logistics cost. Last but not the least Govt might have given a very attractive freebies.

But the problem that new companies will face could be manpower shortage. Which can be addressed by proper skill development programs.
Quote:
Originally Posted by raju2512 View Post
Companies look at long terms issues rather than get guided by short term benefits. Gujarat that way offers a lot of long term benefits like good infrastructure, pro active power management, ports etc.,

A country of our size needs a few more auto clusters like Sanand
Those points add another perspective into such decision making process. There could be many behind the scene political reasons as well.
I agree to one important point which is the pathetic power situation in Tamilnadu and due to which many industries are facing loss of production issues.
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Old 3rd December 2014, 12:57   #6
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Default Ford's Sanand facility: Trial production runs begin

An article in Business Standard mentions that trial production runs have already begun at the Sanand facility, where the company is testing a car based on the Figo platform. This facility is expected to be fully operational by the end of 2014 and will be inaugurated only in the first quarter of 2015.


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Last edited by S2!!! : 3rd December 2014 at 12:58.
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Old 3rd December 2014, 13:23   #7
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Default Re: Ford's global vendors home in on Sanand

Wonder why this thread went into hibernation after 4-5 posts!



This is big news (at least for chennai folks) - IF Ford/Hyundai have finally decided enough-is-enough with the TN govt's lacklustre response to their basic demands and needs!

Unstable TN govt (local people know better), high power shortage, ultra high labor costs seem to have taken its 1st toll - FoMoCo.

Hyundai "may" not follow suit since they are still sitting pretty on Indian Top10 charts (thx to TBhps beautiful month on month threads) - still would keep 'moving' out as a distant Plan-E or a Plan-M if not a Plan-B/C like Ford.

Detroit of India brought happy faces to people in that state - but no one wants to see the '21st century' detroit in its infamous ruins of abandoned workshops and factories!

Last edited by svsantosh : 3rd December 2014 at 13:25.
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Old 3rd December 2014, 13:39   #8
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Default Re: Ford's global vendors home in on Sanand

Everything depends on the sops offered by Governments. Recently Honda was snatched by AP from Karnataka where they offered lot of freebies (of course lots of concessions from central govt to the new states should also help). Manufacturing being not so dependent on niche skills, they will go where its easier to setup business.

Even in U.S, most automotive companies moved to the South where they get more concessions.

Its a great environment for corporations where they can have states compete among themselves and finally offer great incentives for them. Hopefully the segments these companies operate in remains good and can give long term benefits to the people of the states.

Last edited by srishiva : 3rd December 2014 at 13:41.
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