In­dia May Miss EcoSport Drive to US Ford likely to give man­date to ex­port the com­pact SUV to the North Amer­i­can mar­ket, in­clud­ing US and Canada, to Thai­land unit

The Economic Times - - Business Of Brands - KE­TAN THAKKAR

In­ter­nal com­pe­ti­tion at Ford Mo­tor is likely to rob its In­dian unit of an op­por­tu­nity to ex­port the EcoSport to North Amer­ica, where the US au­tomaker plans to launch the com­pact sports util­ity ve­hi­cle in the first half of 2016, people fa­mil­iar with the mat­ter said. Ford Mo­tor is likely to make its Thai unit re­spon­si­ble for sup­ply­ing the SUV to the North Amer­i­can mar­kets, in­clud­ing the US and Canada, said three people. What was on of­fer for Ford In­dia was a likely or­der to man­u­fac­ture 55,000-70,000 units of a face-lifted ver­sion the model in 2016, they said. For Ford, In­dia is al­ready a ma­jor ex­port hub — it shipped 35% of the more than 1.3 lakh ve­hi­cles man­u­fac­tured in In­dia in the last fis­cal year ended on March 31 — and Europe is the main des­ti­na­tion for In­dia-made Ford ve­hi­cles. An or­der to ex­port ve­hi­cles to North Amer­ica would have helped the lo­cal unit im­prove ca­pac­ity util­i­sa­tion at its Chen­nai plant and achieve breakeven sooner than ex­pected now. “But then it is good news for the wait­ing In­dian cus­tomers, who are al­ready fac­ing a wait­ing pe­riod of 5-6,” said one of the people, as the com­pany still plans to run the fac­tory at higher util­i­sa­tion lev­els. “The idea is clear, in­stead of ship­ping more out of the coun­try, Ford would like to sa­ti­ate the de­mand of In­dian cus­tomers first.” The EcoSport is the most pop­u­lar among Ford’s of­fer­ings in In­dia and be­cause of de­mand far out­pac­ing sup­ply, cus­tomers have to wait for months to get the de­liv­ery of the SUV. A Ford In­dia spokesper­son said the com­pany’s pol­icy is not to “com­ment on spec­u­la­tions re­lated to fu­ture pro­grammes or prod­uct strate­gies”. The In­dia mar­ket too will get the face-lifted vari­ant of the EcoSport in 2016. In­dia is the base for Ford to serve the lo­cal mar­ket and Europe. Ford’s Thai unit serves that mar­ket and its fa­cil­ity there will likely be used for ship­ping the EcoSport to North Amer­ica. Ford wants bet­ter ca­pac­ity util­isa-

For Ford, In­dia is al­ready a ma­jor ex­port hub — it shipped 35% of the more than 1.3 lakh ve­hi­cles man­u­fac­tured in In­dia in the last fis­cal year

tion at its Thai­land plant and EcoSport vol­umes will help in achiev­ing that, people close to the com­pany said. Also, noise, vi­bra­tion and harsh­ness lev­els of cars pro­duced in Thai­land are bet­ter than those made in In­dia, a cru­cial fac­tor when sell­ing a ve­hi­cle in the de­mand­ing mar­kets of North Amer­ica.

Ford posted a nearly 24% jump in ve­hi­cle pro­duc­tion in In­dia in fis­cal 2014. Ex­ports rose more than 60% from the pre­vi­ous year, while lo­cal sales — EcoSport ac­counted for most of that — grew 9.4% with 84,469 units.

Though Ford In­dia is un­likely to get the or­der to ship the SUV to North Amer­ica, it plans to crank up util­i­sa­tion of the Chen­nai plant be­cause of its com­mit­ment to ex­port ve­hi­cles to more than 50 coun­tries and sus­tained de­mand for the EcoSport in the do­mes­tic mar­ket.

In 2014, Ford In­dia is tar­get­ing pro­duc­tion of 1.6 lakh units — as many as 1.19 lakh of those will be EcoSport. The plant is ex­pected to run round the clock start­ing the sec­ond half of 2014, a first in Ford's 17-year pres­ence in In­dia. Its plan is to take pro­duc­tion to the fa­cil­ity’s in­stalled ca­pac­ity of two lakh cars a year, if ven­dors can spruce up sup­plies. The sce­nario be­fore the EcoSport launch was very dif­fer­ent. Ford’s mar­ket share was lan­guish­ing at around 3%. The Chen­nai plant was op­er­at­ing at half its ca­pac­ity and Ford In­dia was sit­ting on an ac­cu­mu­lated loss of .` 1,374 crore. But a lot has changed over the past

to crank up util­i­sa­tion of the Chen­nai unit due to its com­mit­ment to ex­port ve­hi­cles to more than 50 coun­tries two years. Its en­gine ex­ports strat­egy has of­fered a good rev­enue stream and the plan to make In­dia an ex­port hub for cars made on the B plat­form — a com­pact car plat­form — is help­ing it im­prove prof­itabil­ity.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.