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Ford plans major thrust in China

Shobha Warrier in Chennai

In order to boost its presence in Asia, Chennai-based Ford India is planning to export auto components to its China unit.

In the first year itself, the auto major plans to exports automotive components worth Rs 50 crore (Rs 500 million) to China.

US-based Ford Motor Company's first 50:50 joint venture in China was signed with Changan Automobile, one of the largest auto groups in China, at Chongqing, in April 2001. This was Ford's first passenger car joint venture in China.

The initial investment for Ford China was about $100 million and the capacity of the plant was pegged at 50,000 cars per annum, which they now want to increase to 1,00,000 by next year. Production at the Ford China plant is expected to start in 2003.

According to Vinay Piparsania, Vice President, Ford India, the China unit's automotive sales volume is expected to reach 5 million (50 lakh) units per year by 2010.

Ford China is currently going to make only the Ikon model, which will be similar to the ones manufactured at the Indian plant except that they would be left hand drive.

During the launch of the manufacturing facility in India, many of Ford India's engineers were given extensive training in overseas locations in Europe, Australia and the US.

Now, when they started their China operation, the company decided to bring the Chinese workforce in batches to India so that they could be given factory training at their Ford India plant.

"The workforce in Ford China requires to be trained on how to make the Ikon and the best way is to give them hands-on training at Ford India. The teams from China have been trained on various aspects of the assembly line, stamping, body, paint and quality engineering," said Piparsania. He also added that the training is an on-going programme.

The first shipment of the automotive parts, carried primary components like regulators, steering columns, chassis parts, horns, brackets, gear shifts and hinges.

While some parts will continue to be exported from India, major part of the components will be manufactured in China said Piparsania, adding, "the sourcing decision is based on financials. With the high volumes, it makes more sense to localise major parts, rather than import from overseas, mainly due to freight and logistics costs."

After sending the first batch of auto components from Chennai, David Friedman, managing director and president, Ford India Ltd stated: "Ford India has consistently reinforced its leadership by setting benchmarks in the Indian automobile industry. The commencement of exports to China further demonstrates the world-class standards, product innovation and business excellence established by Ford in India."

Ford India is currently running at a capacity of 50,000 units but the plant has the capability to run at 100,000 units.

Ford India has been exporting Ikon in completely knocked down condition to countries such as South Africa and Mexico and till July 2002, the company has exported 53,314 Ikons, which is "well ahead of the target in meeting its export obligations. Today, Ford Ikon has become a well-known global brand. In fact 2 out of every 3 cars exported from India is a Ford Ikon," Piparsania said.

When asked where Ford India stands in the overall global operations of Ford Motor Company, the vice president said, "Ford India is recognised as a low cost manufacturing facility among other Ford locations. It is seen as a model for training and development of workforce. India is viewed as a high growth location, and Ford is committed to support its India unit in its growth path."

On Ford India's plans to come out with any other model Piparsania said: "We are continuously evaluating models that have progressive styling and which would match our customer's dynamic lifestyle and would also be fun to drive. We will surely deliver on our promise of launching a new model every year."

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