Last fortnight, Ford India announced that it had completed the expansion of its flexi-engine plant at Chennai. The expansion cost $72 million (Rs 400 crore) and was completed in a record 14 months. The expansion of the plant is a crucial part of Ford’s plan for the upcoming compact SUV, the EcoSport, which will be equipped with the award-winning EcoBoost 1.0-litre petrol engine.
Revealed with much fanfare at Auto Expo 2012 (Ford chief Alan Mulally was in Delhi to do the honours), the EcoSport will have both petrol and diesel versions. It will also be exported. The gameplan for the EcoSport seems fairly straightforward.
A key part of the plan hinges on localisation. “We want to target around 80 percent localisation. We are still in talks and working with the supplier base. Given how aggressive the segment we are aiming for already is, we will need that much localisation. We’d like to see 90 percent localisation eventually,” said Michael Boneham, president and MD, Ford India. At present, the carmaker's products with the most localisation, at around 80 percent, are the Figo hatchback and the Fiesta Classic saloon.
The EcoSport will take a shot at the Ertiga launched by Maruti in April. The Ertiga sells about 5,000 units a month, most of it being diesel. Ford will aim to grab a share of that pie.
Geared for growth
At the completion of the expansion plan on July 17, Boneham said, “The total actual production was getting close to the 200,000 number when our capacity was 240,000. Now with the EcoSport coming, we had to expand our capacity.”
Engine manufacturing capacity now stands augmented at 340,000 units per annum. While the original announcement had estimated capacity post-expansion at 330,000 engines, Ford has managed to push the facility to produce 340,000 units a year, including an additional 80,000 diesel engines, with no further investment. Its upcoming integrated manufacturing facility in Sanand, Gujarat, expected to go on stream in 2014, will also have an engine plant, expanding total capacity to 610,000 engines a year.
Boneham maintained that this expansion project in just over a year was possible thanks to the flexi-engine line, but he conceded that his team did not foresee this big a swing towards diesel in India. As of 2011, 35-40 percent of Ford India's sales comprised petrol variants, but due to the huge swing towards diesel – an effect that had multiple causes – almost 90 percent of sales are diesel cars.
Ford also exports 40 percent of its engines – either in pure engine form or as part of a vehicle – to South East Asia, Middle East and Africa and 90 percent of these exports are petrol engines/cars.
A bulk of the $72 million investment has gone into the unique flexi-engine line. The facility now boasts of a flexible line that can churn out crankshafts for both petrol and diesel motors, a first for Ford Motor worldwide. Close to 85 CNC machines, 20-30 cutting tools for cylinder heads and crankshafts, dedicated cylinder head and cylinder block lines and a dedicated gantry system to take components from one operation to another are some of the highlights of the Chennai plant.
The facility will manufacture 12 DuraTec petrol variants and five DuraTorq diesel variants, thus allowing the workforce to hone its skills working on several variants. The commissioning of the expanded facility is one key step in Ford India’s transformation into a major export and manufacturing hub of small displacement engines – 1.6 TiVCT, 1.4 HC and Duratorq engines will be exported to markets such as South Africa, Thailand and Taiwan.
The engine facility also recently rolled out the 400,000th engine, a petrol motor. This was done in under four years. Gary Johnson, vice-president, manufacturing, Ford Asia Pacific and Africa, commented: “Ford is currently building seven new plants across Asia Pacific and Africa. We are making a significant commitment in India, which will see it become a regional hub for low-displacement engine production.”
Dismissing fears over the slowdown, Boneham said, “We are confident about our investment here, especially with our flexi-line. If there’s a swing back to petrol, we can turn it around and make more petrol engines very quickly. That is not something a lot of companies can do. But we do need a growth in optimism and confidence in the community.” He added that Ford India expects growth to be steady over the long term and that the nine million target for both cars and CVs in India can be achieved by 2020.
KARTHIK H