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Ford Invests $72 Million in the Chennai Engine Plant

CHENNAI, India – Ford Motor Company is pursuing an aggressive growth strategy in the Asia Pacific and Africa (APA) region. On May 17, Ford India announced a USD 72 million investment to increase production capacity at the Chennai Engine Plant in India.

Joe Hinrichs, president, Ford APA, and president and CEO, Ford China, discussed the company’s new investment in Chennai and the unprecedented growth in APA that is rapidly reshaping the automotive industry landscape.

Q: Why is the APA region so important to Ford’s future business?
A: Around 70 percent of the company’s growth in the next ten years is expected to come from APA markets. This unprecedented growth has already begun: in the first four months of 2011, for example, Ford APA sold 275,878 retail units – that’s a 26 percent year-on-year increase. A wave of growth is sweeping APA as the industry is predicted to increase to an estimated 35 million units by 2018.

China and India are the world’s fastest growing automotive markets. As these countries develop, millions of people will be able to fulfill their dreams of vehicle ownership, and to enjoy the freedom of personal transportation that Ford products offer. Under the One Ford plan, the company will introduce 50 new products and powertrains to the APA region in the next four years.

Q: What is Ford doing to take advantage of this growth?
A: We are moving quickly to take advantage of explosive economic growth in Asia. Now that we have streamlined our global operations and strengthened the company’s financial position under our One Ford plan, we are in a great position to expand the APA region.

Q: How will the new investment in Chennai advance the One Ford plan?
A: Ford has already invested nearly USD 4 billion to transform manufacturing facilities across the APA region from low-volume local production to high-volume regional production. The USD 72 million investment in Chennai is the latest step in that ongoing effort, and it brings Ford’s total investment in India to more than USD 1 billion.

Eight new global Ford vehicles will be introduced to the growing Indian market over the next four years. Even more significantly, we are elevating Ford India’s role as a small-car manufacturing and export hub for markets worldwide. The incredibly popular, award-winning Ford Figo, an instant hit amongst Indian drivers, is already being exported to South Africa and Mexico, and will be introduced to 50 more international markets this year.

Q: How will the expansion programme improve capabilities at the Chennai Engine Plant?
A: When the build-out is completed in mid-2012, the plant’s production capacity will increase by nearly one-third: from its current 250,000 units per year to 330,000. The Chennai plant is the first Ford facility with a single production line capable of producing both petrol and diesel engines, and we are boosting our diesel engine capacity by 80,000 units. In order to support this increased productivity, Ford India will add more than 300 new workers to staff a third shift at the engine assembly plant.

Today, the plant produces five Duratec petrol variants and one Duratorq diesel variant. The Chennai Engine Plant is currently gearing up to produce powertrains for the introduction of the all-new Fiesta to India later this year. During the past year, the plant has been exporting more than 4,000 1.4L and 1.6L engines to Auto Alliance Thailand every month. Ford India has been supplying Ford Motor Company of Southern Africa with diesel engines since 2008. Our plan is to export more India-built petrol and diesel powertrains to more markets in the near future.