According to a media report, Ford is planning to sell one of its factories in India. The company currently operates plants in Chennai, Tamil Nadu and Sanand, Gujarat.

It is believed that the carmaker is in talks with at least one global automotive company for the sale of its Sanand plant. The negotiations are reportedly being handled by Ford's Asia-Pacific headquarters in Shanghai. However, a Ford spokesperson has rejected these rumours.

Ford's Sanand plant was set up in 2015. The company is said to have invested around US$1 billion in the facility. It has an annual capacity of 2,40,000 cars and 2,70,000 engines.

The Figo and Aspire are built at the Sanand plant. The facility also caters to the export market. Cars built here are exported to more than 30 countries.

Source: Livemint

Ford is rumoured to have cut monthly production at its plant in Sanand, Gujarat to almost 50% of its original target. This step has been taken as a result of the weak demand for the company's new products.

Ford produces the Figo Aspire compact sedan and the Figo hatchback at the Sanand plant. The Aspire was launched in India in August 2015, while the Figo hit showrooms in September 2015. Both these cars are positioned in highly competitive and crowded segments. Established players such as Maruti Suzuki and Hyundai dominate these segments.

While, sales of the compact sedan have fallen by 74% between August 2015 and March 2016, sales of the hatchback have declined by 60% between October 2015 and March 2016.

According to media reports, the combined monthly production targets for the Figo Aspire and Figo were brought down from an average 20,000 units to 10,800 units. The average monthly production is reported to be a meagre 6,500 units.

At present, vehicles built at the Sanand plant are shipped to the Middle East, South Africa and Mexico. The facility was expected to start exporting cars to Europe in 2016, but the plan seems to have been delayed due to unknown reasons.

Source: Money Control

Last year, Ford India had invested 1 Billion USD in Sanand, Gujarat to build a new production centre.

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.

Presently, Ford's Maraimalainagar plant, near Chennai already runs at full production capacity of 2,00,000 cars and 3,30,000 engines per year in three shifts. The Sanand facility is said to have a production capacity of 2,40,000 cars and 2,70,000 engines per year. This new centre at Sanand will roll out the next generation Figo hatchback and Ford's upcoming compact sedan based on the Figo.

Honda Cars India is contemplating a 3rd factory to cater to the Indian car market. The 3rd factory from Honda could be set at Sanand, Gujarat. Rumours of Honda conducting a feasibility study at Sanand for its proposed third Indian factory has appeared on TheIndianExpress. Honda's third factory is likely to spearhead the Japanese car maker's efforts to boost its market share in India. Also, the feasibility study for the new factory could be aligned with Honda's plans of entering the high volume A-segment, a space that plays host to the likes of the Tata Nano, Maruti Alto and the Hyundai Eon. 

Note: Honda Brio image used as an illustration. 

Currently, the Brio hatchback, which starts at a little over 4 lakh rupees, is Honda's least priced car sold in India. So, the space for a car that is priced lower than the Brio definitely exists in Honda's current car line up. The A-Entry model, said to be aimed at a 2017 debut, could be the product that Honda can position in the 3 to 4 lakh rupee space. As of now, the Japanese car maker is struggling to meet demand for its Amaze compact sedan, whose diesel variants have turned out to be stiff sellers. Honda's second plant in Tapukara, Rajasthan, will be ready to go on stream next year. 

When the Tapukara plant begins production, its 120,000 annual car production capacity will nearly double Honda's current installed annual capacity of over 120,000 cars. Tapukara is situated in Rajasthan, an arid region of India and Honda is not likely to expand the Tapukara factory owning to water availability constraints. Gujarat, a neighboring state with well-developed port infrastructure, could be an attractive destination for Honda. Also, Sanand is being developed as an automotive hub by the Gujarat government. While Tata Motors has established a greenfield facility to build the Nano, Ford is putting the finishing touches on its own factory, due to go on stream in 2014. 

In the next couple of years, Honda Cars India will launch no less than 4 all-new products in the Indian car market. These include: 2014 Jazz hatchback, 2014 City sedan, 2014 Honda Mobilio MPV and the production version of the 2015 Honda Urban SUV concept. All these products will be available with the diesel engine option, a factor that could make them hot sellers in India. So, Honda will require quite a bit of production capacity to satiate India's demand for diesel engined cars. Honda's third car factory in India, notwithstanding its location, will be tailored to meet this demand.