Ford Lays Cornerstone for $1 Billion Automotive Manufacturing Plant in India

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(Photo: Stock.xchng)
(Photo: Stock.xchng)

BUSINESS

  • Construction set to begin at new Sanand plant in Gujarat
  • New manufacturing facility to produce 240,000 cars, 270,000 engines
  • Ford to release eight new vehicles in India by 2015

Ford has set in motion its new $1 billion manufacturing plant in Gujarat, India, despite the country’s uncertain economic forecast.

At a ceremony at the Sanand plant in western India, Ford India laid the cornerstone at the shop, which will grow into a state-of-the-art facility. Around 240,000 new cars and 270,000 engines will be manufactured per year for both domestic and export markets.

Construction is scheduled for completion in 2014.

Despite a recent slump in auto sales in India, Ford India managing director Michael Boneham said the outlook was positive: “Today we lay the foundation for Ford’s continued expansion in India, and plant the seed for a brighter future.” 

He added: “With this new state-of-the-art Ford Integrated Manufacturing Facility for Sanand, we are committed to significantly increasing our manufacturing output and aggressively expanding our business in India.”

Trailing GM

Car sales in India for the fiscal year ending in March have grown just 0.3%, compared to a 29.5% rise the previous year.

Asia’s third-largest economy has slowed over the last year, with high lending rates and the central bank’s aggressive efforts to limit inflation having resulted in a drop in demand.

Forecasts for this year put India’s economic growth at 6.9%, down 1.5% from a year earlier.

Ford’s consumer vehicle sales from April 2011 to February 2012 dropped 5% to 83,693 units. This comes on the back of a period of strong growth, which was buoyed by healthy sales of the inexpensive Figo compact car.

Despite investments of $2 billion in the Indian market, Ford has yet to reel in fellow Detroit-based manufacturer General Motors.

The new plant in Sanand will contribute to Ford’s Indian market goals of releasing eight new cars by 2015.

Industry experts expect Indian auto sales to pick up as the economy strengthens and borrowing rates fall. Risk analysis company IHS expects passenger and commercial vehicle sales to double through 2019, when it forecasts sales of over 6 million cars.

Key Statistics - Automotive Manufacturing Industry in India (source: MarketLine)

  • Between 2006 and 2010, India’s automotive industry grew at an annual rate of 12%, generating total revenues of over $45 billion in 2010.
  • Production volume in the Indian auto market grew at an annual rate of over 8% between 2006 and 2010, reaching a total of 14.4 million units in 2010.
  • Growth in the Indian auto industry is expected to slow, with annual rates of under 8% forecast between 2010 and 2015.
  • The Indian automotive manufacturing industry is forecast to top $66 billion through 2015.

By James Mulholland for
James Mulholland is a Paris-based internet and broadcast journalist specializing in sports, current affairs and technology news, while also freelancing as a photographer.

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