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Ford Struggling To Finalize Expansion Plans
The Ford Figo is its highest selling models and Ford has managed to build just 5,700 units in June due to shortage of parts. Ford India which had previously announced that it would be launching eight new models would definitely struggle of the shortage of parts continues.
Michael Boneham, managing director said, “We wished to produce more units of the Figo but the problem is constraint-driven. The auto component-making cluster is struggling."
With demand for diesel cars increasing dramatically, the American carmaker also appears to be ill prepared for it. Its powertrain production plan is focussing more on building petrol engines while demand for diesel cars has reached close to 50 per cent. If Ford has to respond to the changing market demands it has to work on its new plant.
Ford has so far held talks with government officials from Tamil Nadu, Gujarat and Maharastra. However it has not finalised the location. Ford requires at least 20 months to build a new plant and to make it operational. Any further delay by Ford will hamper its plans in India.
Ford India has refused to comment on its expansion plans. It has only said it was preparing to make a huge investment in India. Ford intends to make its new plant also as an export hub. With domestic demand increasing steadily one can only doubt if Ford India can deliver cars quickly. Maruti Suzuki also had to face a similar situation where domestic demand picked up exponentially and it had to quicken the process of opening its new plant to meet demand.
Ford India's Michael Boneham has said Ford is already utilising 95 per cent of its engine capacity and 100 per cent of its vehicle capacity. Yet the company is not confirming its expansion plans. Gujarat government officials have said Ford has promised an investment of Rs.5,000 but the carmaker has not confirmed this.
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