Battered in US: Ford bets on India, China

June 2009: Ford Motor is banking on its subsidiaries in India and China to tide over the unprecedented crisis that has gripped American auto –mobile manufacturers.

“India is a great market to be in, particularly so at these challenging times. The $500million funds injection to expand operations in the country is on schedule,” Ford India vice president (sales) Timothy Tucker said. The new investment increases Ford’s total financial commitment in India to more than $875 million, and under-scores its plan to elevate India as one of the strategic production facility in Nanjing, China, for $510 million.

Ford is the only one among the US big-three that has not sought emergency federal aid. General Motor Corporation has filed for bankruptcy that will lead to a funds infusion of $30 billion by the US government. A US bankruptcy judge has also approved the sale of a huge chunk of Chrysler’s assets to a group led by Italiy’s Fiat SpA. “Ford is arranging for funds on its own to make way through this tough time.

Our presence in large markets like India and China are a comfort. When we launch the small car in India early next year, it will mark our entry into the mass segment and shore up marketshare,” Tucker said.

Though Ford has been in India for nearly 15 years, it’s delay in entering the compact segment has meant that it remained a fringe player Compacts comprise two0thirds of the Indian auto Mart. To brace up for the small car launch that will give it a firm footing in the number game, Ford India is focusing on lowering costs and increasing penetration. “We have stepped up localization drive and initiated a child parts programme to reduce cost of ownership. Now, we have 90% localization for Ikon and 80% for Fiesta. In the past three years, ownership cost has been reduced by 20% through quality improvements, localization and creation of child parts that require replacement of smaller components,” Tucker said.

Dealership network is also being strengthened from 135 centres in 70 cities now to 158centres in 86 cities by this year end. New dealership is being added in all metros, including Kolkata as well as in tier-2 and tier-3 cities.

To deal with service challenges (pressure will skyrocket at service points following the introduction of compacts), the company is adding more service points and rollout out quick service to improve efficiency and productivity at existing outlets.

Two quick service bays were launched in Kolkata on Friday that can turn around a car in 90 minutes flat.

“The operations in the bays are synchronized. It is almost like an assembly plant operation with the service staff trained to do the job thoroughly as fast. So far, the quick service concept has been introduced in 26 dealership outlets,” Ford general manager (customer service operation) Jesus Metelo Arias said.