Ford to Invest US$1 Billion in New Gujarat Plant

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Jul. 29 – U.S. auto giant Ford said yesterday it would invest US$1 billion to build a vehicle assembly and engine plant in Gujarat as it increases production to exploit the country’s burgeoning car market. The new factory will employ around 5,000 workers and will be the firm’s second in India.

“Ford has very aggressive expansion plans in India and in Asia Pacific and Africa,” stated Joe Hinrichs, president of Ford Asia Pacific and Africa.

”This new investment will be important in realizing our growth strategy,” Hinrichs said, calling India “one of the most dynamic regions in the world.”

The facility in Sanand, 40 kilometers (25 miles) from Gujarat state’s main city of Ahmedabad, will have an initial annual capacity of 240,000 vehicles and 270,000 engines. The company already has a plant near the southern Tamil Nadu port capital of Chennai, where it manufactures small cars such as the Fiesta as well as the Endeavour sports-utility vehicle. Ford’s Chennai plant can assemble up to 200,000 cars a year.

The U.S. group will begin building on the Gujarat site this year with the first vehicle and engine slated to come off the assembly lines in 2014. Thursday’s announcement brings the U.S. car giant’s total investment in India to some US$2 billion. The company aims to introduce more products from its global portfolio and other Asia Pacific and African markets into India as it seeks to tap the country’s growing domestic car market.

Gujarat has emerged as an investment magnet for car and other manufacturers with its business-friendly policies.

Some 60 percent to 70 percent of Ford’s growth is expected to come from the Asia Pacific and Africa region over the next 10 years. India has become a battleground for global vehicle manufacturers such as Ford, GM and Volkswagen. They have been hoping to offset sluggish sales at home by steering towards India and China, seeing huge potential in their billion-plus populations.