Ford to buy $40-m components from Indian auto ancillaries
By Chennai: | 05 Jun 2003
Presently Ford Motor is sourcing components for its Ford Ikon model, which is exported to South Africa, Mexico and China. The car is rolled out of Ford India''s plant near Chennai. Says Ford India vice-president and executive director (programmes implementation and supply) Arvind Mathew: "Ford Motor is looking at buying castings, forgings, leaf springs, crankshaft and exhaust parts."
For now, Tata Auto Plastic (door trims), Titan (clocks), Synergy Dooray (alloy wheels) and Visteon (starters and alternators) and Cooper Tire & Rubber Company (brake tubes, fuel and brake bundles, clutch tubes, nylon fuel lines and power steering hoses) export to Ford Motor from here.
The entry of major car companies into the Asian region — mainly India and China — and the focus on improving quality by the domestic auto ancillaries have encouraged global auto companies to look at this region as a component sourcing base.
According to a recent Investment and Credit Rating Agency (ICRA) report, Indian auto ancillaries enjoy the cost advantage in producing labour intensive components. Car majors in the US, finding their market stagnating, are now on a cost-cutting binge to protect the margins.
In order to upgrade the product and process quality of domestic auto ancillaries, multinational auto companies provide the necessary technical assistance and, at certain times, financial assistance. While Maruti Udyog practised a cluster approach, Ford Motor has laid down stringent standards, popularly known as Q1 standards. There are 10 Indian auto ancillaries that have been classified as Q1 suppliers, out of which seven are located in Chennai.
Adds Mathew: "We have more than 90 suppliers in India and we expect all of them to attain Q1 standards in due course. Though Ford Motor is strict about its suppliers, the company has made allowances for the Asia Pacific region, considering the recent set-up. But if suppliers do not comply even after the stipulated time frame, they will be out of the supply chain."
On their part the component industry is also rising up to expectations. Already two domestic component manufacturers have won the prestigious Deming Award and a couple of companies have won the supplier awards from global equipment manufacturers (OEM).
The latest to join the club is the Rs 8-crore Cooper Tire & Rubber, which has been awarded the Gold World Excellence Award by Ford Motor. The Chennai-based firm is the first Indian company that has got nominated and won the recognition, along with 41 other global suppliers, from 13 countries. The nomination for the award is open to all suppliers of Ford Motor worldwide.
Says Cooper Tire & Rubber managing director K K Tiwari: "The company will close the current fiscal with a turnover of Rs.15 crore. Based on the order-book position and other enquiries we will achieve around Rs 30-crore turnover next year."