Ford in India has opened a new $1 billion vehicle assembly and engine plant in Sanand, in the northwest region of Gujurat, the carmaker’s second major production facility in the country. The plant will have an initial annual capacity of 240,000 units, while the engine plant will start with an annual capacity of 270,000 engines.
“Ford is in a position to enhance India’s credentials as a world-class manufacturing hub for small cars and low displacement engines,” a spokesperson for Ford India told Automotive Logistics. “With Sanand being fully operational, we aim to triple our exports over the next five years.”
The new plant will double Ford’s installed capacity in India to 440,000 vehicles and 610,000 engines. Ford has an existing facility Maraimalai Nagar, near Chennai, on the south-east coast, which makes the Figo, Fiesta and EcoSport models amongst others.
Ford India would not provide a breakdown on what percentage of output from the Sanand plant would meet domestic demand and what would be exported, though it is thought that the carmaker is planning to export 50% of total production in India. Last year it registered a 29% year-over-year growth in combined domestic wholesales and exports, totaling 154,121 vehicles. Exports in 2014 nearly doubled to 76,981 vehicles while domestic wholesales stood at 77,140 units compared to 80,431 units in 2013.
The company expects the market to be between 6m-7m units by 2020.
“With today’s opening of our plant in Sanand, we have taken our growth commitment to a new high in India,” said Mark Fields, Ford president and CEO, who attended an event held to mark the opening. “We are doubling our manufacturing capacity in India, creating good jobs and serving our customers around the world with great products.”
Back in 2013 Ford said that its business in India would focus increasingly on production for export to more than 50 markets around the world, supported by the flexibility of its One Ford plan, which would give it the ability to export “a substantial portion of its total production volume”.
The carmaker uses the port of Chennai for exports from India at the moment, given the vicinity of the Maraimalai Nagar plant to the port. It is not year clear where exports from Sanand will be exported on the northwest coast, though, as reported this month, NYK Auto Logistics India and APM Terminals are building a new dedicated ro-ro terminal at the port of Pipavev in Gujurat.
On the inbound side, Ford announced last year that it was changing its inbound logistics outsourcing in the country ahead of the opening of the Sanand plant. Speaking at the Automotive Logistics India conference in Gurgaon Ford’s vice-president for logistics and export operations for Asia Pacific Africa, Amlan Bose, explained that Ford was moving from the use of a third party logistics provider (3PL), which managed transport through a mix of its own assets and other carriers, to a ‘lead logistics provider’ concept with asset-light provider Penske Logistics.