Ford India has expanded the diesel engine production capacity at its plant in Maraimalainagar, near Chennai. This, the company hopes, will help address the supply constraint it faced early this year.
In the first quarter of the year, Ford India’s Chennai plant was unable to meet the demand for diesel power-trains. Customers had to wait for three months to have their cars delivered.
“With the diesel engine capacity expansion, the waiting period will reduce to two-three weeks,” said Mr Michael Boneham, President and Managing Director. “We hope this will boost Figo and Fiesta sales.”
The plant can now produce 3.4 lakh engines a year – up from 2.5 lakh in 2010. It can also make two lakh cars annually.
The expansion has added manufacturing capacity of 80,000 diesel engines at an investment of $72 million. With this, the total diesel engine capacity at the plant has gone to 1.6 lakh units; petrol engines account for the remaining.
This comes at a time when the government is proposing an increase in tax on diesel-powered vehicles. “We have a flexible single crank line that can produce both diesel and petrol engines. So, if the customer swings back (to petrol), we can respond. But if there is a huge pendulum swing in policy, no manufacturer can respond quickly,” said Mr Boneham.
Ford hopes to enter the compact SUV segment with the launch of Ecosport (from the Chennai plant) in the first quarter of 2013.
Ecosport will be launched in both the petrol and diesel variants; it will also be exported from India.
Ecosport launch
“Ecosport will give us a tremendous growth pad in the Indian market. Renault’s Duster has increased the excitement around the category. Customers are starting to recognise the SUV type of vehicle.”
Mr Boneham said high interest rates and excise duties have driven down customer confidence. He hopes things will pick up during the festive season.
“The Society of Indian Automobile Manufacturers has revised market growth from 11-12 per cent to 8-10 per cent. We will be in line with those estimates. But we are confident about the Indian market in the long term.”
The engine facility at Maramalainagar was commissioned in 2008 with one variant.
Today, it manufactures 17 variants. About 40 per cent of the engines is exported to Asia Pacific and Africa.