India's key role in Ford's B-Car strategy

India will be the powerhouse that drives Ford's export sales success throughout the Asia/Pacific and Africa (APA) region over the next few years.

The company has production facilities scattered across the region (including Australia, Thailand and China), but it's the two Indian facilities that will capture the lion's share of revenue from burgeoning sales in this part of the world.

During the launch last week of the Ford EcoSport compact SUV, Michael Boneham, Ford India President and MD, told journalists at the press conference for the car that the company was spending up big in anticipation of proportionally larger gains from sales in the region over the next two decades.

"In July we announced a commitment of... one billion [US] dollars in an all-new integrated manufacturing facility in Sanand, in Gujarat. It will create 5000 new jobs in India. When it comes on line in 2014 the new Sanand plant will give us vehicle assembly operations and engine production capacity to continue to deliver on our new wave of global products."

The ex-pat Aussie was joined on stage by his boss, Joe Hinrichs, President of Ford's Asia/Pacific region. Hinrichs outlined the reasoning for Ford's lavish investment in India, beginning with a surge of eight new products on the horizon.

"Our manufacturing network is getting ready for this new wave of products..." he said. "The expansion of Chennai [where the Figo is built for Indian domestic sales and export to South Africa] and the new plant in Sanand, will play an important role, by producing vehicles and engines for India and beyond. By 2014, our production pace here in India will be amazing."

Subsequently, Hinrichs had this to add.

"A lot of our competition is using India as an export base. If you can look at how we've set ourselves up in India, geographically, we have the Chennai plant, which is in the south east... And now we have the Sanand Gujarat plant in the north west... so we set ourselves out strategically to have two manufacturing centres... and we can go any direction from an export standpoint...

"I think markets like India and Thailand are strong export bases; China has so much internal growth still ahead of it — and we're still building plants to supply China. So in the near term, China's going to be supplying China."

For Ford Australia, the parent company's heavy investment in the region is good news, even if the money is allocated to manufacturing facilities on the subcontinent rather than here. Broadmeadows is better placed than Dearborn or Cologne in terms of the Indian time zone — and the Aussie arm already has runs on the board for producing commercially successful products for the Indians to build. Product development staff and facilities are increasingly expensive while the Australian dollar is up around parity with the American dollar (see separate story 'Dollar levering Aussie firms out of contention'), but Hinrichs remains very supportive of the local team's efforts.

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