Ford India moves towards becoming Asiapac diesel engine manufacturing hub

Mumbai: Ford India is doubling the output from its diesel engine plant near Chennai to enable it to reach its full manufacturing capacity of 60,000 petrol and diesel vehicles a year. With the doubling of capacity, Ford will make 50,000 diesel engines and 10,000 petrol ones. The engine plant, which makes Duratorq diesel engines for Ford's Fiesta and Fusion, will start a second shift soon.

It now makes about 100 engines a day on a single shift basis. The second shift would make Ford utilise the full capacity of 60,000 units per year. The company will first begin  manufacturing the 1.4-litre diesel Duratorq engines. 

Ford India, which will eventually have a capacity of 250,000 engines aims to first sell the engines in the Indian market, and then go in for exports.

Michael Boneham, president and managing director of Ford India said, "The domestic assembly of these engines will facilitate quicker time-to-market response, and greatly enhance the efficiencies of our operations," he said. He went on to say that the facility would help position Ford India as a strategic manufacturing hub for low displacement powertrain engines within the Asia Pacific and Africa region.

The diesel plant at Chennai started production last month and has enabled Ford India to make a saving of 20 per cent as by increasing the indigenous content in the Fiesta to 85 per cent from 80 per cent and in the Fusion to 60 per cent from 55 per cent. This has  improved the company's ability to price its vehicles more competitively better in the Indian market, which is expected to touch 2 million units by 2010, said Boneham.

The company now imports diesel engines from Ford Europe and sources Rocam and Sigma petrol engines from Avtec in Indore.

During the next phase of expansion, the current assembly operations will be integrated with flexible engine manufacturing facility, said Bonheham.

The company has developed 25 new suppliers for the diesel engine assembly plant, which constitutes about 50 per cent of the local content. About 25 items including consumables and components such as piston, rings, gaskets and springs have been localised. At present the company imports critical components like crankshaft, camshaft, cylinder block, cylinder head and connecting rod and machines the blocks.

Boneham also said that Ford would eventually look at options to source crankshaft, the cylinder head and block.

The 1.4-litre turbodiesel Duratorq engines made at the Chennai plant currently , goes into its Fiesta models. Company executives said that switch over to producing the 1.6-litre petrol engines can be made based on demand.

Ford India had announced a capex of $500 million in January this year to double manufacturing capacity to 200,000 units by 2010 and make a small car to compete in the dominant segment of the market.

At that time the company had clarified that its small car, likely to debut in India by 2010, would not be priced anywhere near the Nano.  It will also be exported to various regions apart from Asiai PAcific. Ford also plans to continue with its discounting strategy on various vehicles. It recently reduced price of its entry-level sedan, Ikon, by Rs40,000 to arrest declining sales.

Ford India's market share has fallen in India as sales declined 19 per cent to 33,880 vehicles in FY08. The company is also considering introducing its next generation Fiesta compact cars in India, which made its debut in the Geneva Motor Show this year.

View: Auto videos | Auto picture galleries