Dave Schoch, President of Ford Asia Pacific, recalls a defining moment for him and Ford some time ago. Earlier, as CFO, when he was asked to take over as president for the region, he asked one question of the Ford top brass: whether it was committed to growth in the Asia Pacific region and to markets such as India and China.
He got his answer in hard cash. Ford, which had invested $1 billion in India, is investing another billion dollars to set up an engine and assembly plant in Sanand, Gujarat, from where it will start production next year.
Expansion
Of this, $142 million has been invested in expanding the production line at its factory near Chennai to make the EcoSport which, it expects, will do as well for it as the Figo did at its launch.
Speaking to the media here along with Schoch and India President & MD, Joginder Singh, Alan Mulally, President and CEO, Ford Motor Company, underlined that commitment to the region. “We are making profits now; clearly, over the next few years, Asia Pacific will be a major contributor — 40 per cent of our revenues will come from here, which is the fastest growing region in the world. Ford is committed to serve customers here,” Mulally emphasised.
Ford, said Mulally, wasn’t focused on India so much earlier.
“We were number one in the US, making all those large vehicles. But, we made this big decision six years ago to look at every market around the world. It takes time to create a pipeline (of products),” he explains.
In Chennai to give the Ford India employees a pat on the back for kicking off the EcoSport production, Mulally says the compact SUV is a good example of responding to the market. “Who would ever have thought that a small SUV on a B segment platform would be one of the fastest growing segments led by India and also in markets around the world?”
The B segment of the car market will be at the centre of Ford’s growth strategy. “We will have two million vehicles a year on the B platform by 2015,” he says. Its Fiesta and the Figo are all built on the B platform.
This common platform caters to a range of vehicles in this segment with different, what it calls, ‘top hats’, or the vehicle body riding on these platforms, for each region.
Asked about the poor market conditions which have been a drag on industry sales, Mulally says that Ford takes a long-term view.
“We’re not concerned about the near term. Governments and companies are going to work for economic betterment; that’s our fundamental premise.”
Ford India reported a 22.46 per cent decline in total sales in May this year at 5,993 units.
The company had sold a total of 7,729 units in the same month last year. Exports — “we export the Figo to 38 countries,” says Mulally — grew 17.6 per cent in this period. India can also be a key export hub for the EcoSport, he adds.
Luxury segment
Mulally emphasises that Ford’s focus will be purely on the Blue Oval brand and the Lincoln in the luxury segment.
A few years ago, Ford hived off a slew of brands it acquired, including Jaguar Land Rover, to the Tatas.
“Every time I see a Jaguar or Land Rover, I feel good about them. They are world-class products and I’m glad we found good owners for those brands,” he says, a mite wistfully.