Chennai: Ford India Pvt Ltd has decided to make a small car in India 10 years after it set up operations in the country. The company says it will introduce a small car in India some time in 2010 at its Maraimalainagar plant near Chennai.

Ford will also start exporting engines out of its proposed 2.5 lakh units integrated engine plant.

The two proposed projects will involve an investment of $500 million and will be funded through a mix of equity and debt.

The investment will qualify for the super mega project definition of the Tamil Nadu government to be eligible for attractive tax incentives.

With this announcement, Ford Motor's total investment in India will go up to $875 million.

Speaking about the two new projects, Arvind Mathew, managing director & president, said that by 2010, the total vehicle production capacity will be doubled to 2 lakh units.

"The small car will be mainly for the Indian market. Small numbers will be exported," he added.

He replied in the negative on the company having plans of importing a small car from Thailand till the Indian plant starts rolling out the small car. Instead, he said Ford India had major plans of exporting engines out of India.

"The plant will make diesel and petrol engines. We will make engines of different capacities and export the same to Asia Pacific and African markets," he said.

However, Mathew declined to comment on the engine sizes and the models in which they would be fitted.

"The integrated diesel engine plant is the first plant for Ford Motors outside Europe. The proposed investment in India is the third major announcement made by the company in the Asia Pacific and Africa region," said John Parker, executive vice president, Asia Pacific and Africa, Ford Motors.

In 2007, Ford Motors announced a $500 million investment to build small cars in Thailand ,just weeks after launching the production of small cars at a new $510 million facility in Nanjing, China.

Meanwhile Ford India is in the process of completing its 50,000 units diesel assembly plant at Maraimalainagar to cater to the demands of Fiesta and Fusion models.

According to Mathew the assembly line will later be integrated with the proposed engine plant.

With Indian operations gaining importance now in Ford Motor's global map, the latter is beefing up Ford India's human resources.

The Indian subsidiary has got a new vice president- operations by name Michael Boneham.

According to Mathew, Ford India is now profitable. The company produced 45,000 nits last year.