Growing Market Demands Lead Ford to Build Sleek New Plants…in India

Ford Motor Company has announced that it will build a vehicle manufacturing facility and an engine plant in Gujarat.

According to The Manufacturer, Ford will invest approximately $1 billion in the two facilities, which include stamping, body, paint and assembly operations for vehicle manufacturing, as well as machining and assembly operations for engine manufacturing. The vehicle manufacturing plant will have an initial annual capacity of 240,000 units, and the engine plant will have an initial annual capacity of 270,000 engines. Ford’s investment will also create 5,000 jobs at the new facilities.

The manufacturing operation is slated to be built on a 460-acre site, with adjacent land protected by local government in order to attract and locate automotive suppliers within close proximity of both plants.

"The first vehicle and engine are scheduled to come off the line in 2014,"  claims a recent Ford report .

"These new state-of-the-art facilities will help us reach the goal of increasing worldwide sales by nearly 50% by mid-decade to 8 million vehicles per year," Ford's President Asia Pacific Joe Hinrichs, said in a recent article by moneycontrol.com

Hinrichs continued: “We are delighted to announce that Ford’s newest vehicle manufacturing site will be here in Gujarat. Ford has very aggressive expansion plans in India and in Asia Pacific and Africa, and these two new plants will be important in realizing our growth strategy here in one of the most dynamic regions in the world.”

Also in The Manufacturer report, Ford selected Gujarat because of its pro-business environment (something of a rarity in the U.S),  infrastructure, access to ports in northwestern India and its skilled workforce. The new facilities, which plan to capitalize on the popularity of the Figo model which has sold more than 100,000 in just 15 months, will allow quick access from operations at the new manufacturing site to the heartland of the critical north and western India regions, where the largest share of the country’s passenger car industry exists.

Ford also plans to bring more than 50 new vehicles and powertrains to its Asia Pacific and Africa region by mid-decade. Sixty to seventy percent of Ford’s growth is expected to come from this region over the next ten years.

This additional investment brings Ford’s total investment in India to approximately $2 billion.

Ford is just one example of the many American companies that are currently investing billions of dollars and jobs (something sorely missed in the U.S.) into foreign countries because, well, that is where the opportunity is.

Ford Motor Co., the responsible Detroit manufacturer, is currently battling uneven competition against government-sponsored motors while simultaneously fighting off a looming UAW strike. Also, it's not as if they can simply set up in a Right to Work state. (As we saw in the unfortunate case of  Boeing, that may not be the most efficient or [if the current administration has its way] legal route.) Somewhere between these issues, Ford is supposed to turn a profit and things have not been made easy for them in the U.S.

Fortunately for them, they have found a strong market demand and a pro-business environment in India.