New Delhi: Gary Johnson, Ford Motor Co.’s vice-president for manufacturing operations, is on a mission to build seven factories in the Asia-Pacific and Africa region, including one in Gujarat. By 2015, these factories would deliver 50 products—out of which eight will be for India, mostly in the small-car segment—and the entire region is expected to contribute 70% of Ford’s overall revenue growth by 2020. In an interview, Johnson said the company is upbeat about India and its strategies are unchanged despite a slowing economy. Edited excerpts:

Does the current slowdown in Indian market deter your plans?

In India, it is still efficiently positive even though some of the economists are warning that these economies are a bit slower. But we want to be part of the growth here. So for us, if we look at India specifically, it’s a market of 4 million by 2015 to 9 million cars by 2020 and we want to be part of it and that’s why we are bringing products and plants out here. If we compare India to other regions, it is growing. China had a pretty good month (August) and year to date and it is ahead of its sales target. So, India, China and Asean (Association of Southeast Asian Nations) are the three manufacturing hubs that push the market. So, nothing has changed in our strategy. There will be eight products for India by mid decade and in total 50 products for Asia-Pacific region.

Do you have enough capacity for these many products?

Absolutely. We have mentioned we want to build nine plants in the region. Two plants have already been built in China and another two (engine plant and vehicle plant) of them are being built in India and five more will be built in China. All those plants are going to support our global platforms. We are putting in $4.9 billion (around 27,097 crore today) for these plants. It (India) fits in our whole strategy for growth because this will be the only place where EcoSport (Ford’s upcoming compact sports utility vehicle) will be built and will be launched in other markets very quickly.

So, we continue to say that around 60-70% of our growth will come from the Asia-Pacific region. So, even if there are some hiccups in China and a little bit of slowdown in India, the forecast is still going to take off. India is a little bit slower but it is still growing between 4-5%.

But EcoSport seems to be getting delayed. Is there a global delay?

No, it has not. That’s the perception around the places. When we unveiled the vehicles in Delhi auto show, we unveiled the exteriors and then in Beijing motor show, we revealed the interiors. That was like two months ago. This is a global vehicle. Always the strategy has been Brazil, China and then India and our plan has always been to launch that vehicle in 2013 and we are on track to do that. This is what we did with Figo. We unveiled the exterior first and then unveiled the vehicle 12 months later. It is just a strategy. We wanted to use India as exterior platform to reveal (the model) because this is going be a major market both domestically as well as for export.

How different are your new plants from the ones in the West and how difficult is it to meet the cost targets of making cars in this part of the world?

As part of our global strategy, our standards are same everywhere. Our plant in China and Thailand are mirror images of each other. The processes are the same. Equipment is the same. It’s the exact same process.

Globally, we are also taking some legacy plants and updating them with the same processes. So the other seven plants will fit that global standard. It is part of our “One Ford" strategy.

On the cost front, the key for us is to build where you serve. It’s a very simple strategy. If the market is going to be 9 million by 2020, then we need to have plants here to support, along with exports, because India will be extremely competitive cost-wise. For suppliers, for labour, efficiency is the plan.

Given your experience of handling 19 factories together, how serious is the labour issue in this region and is automation a solution?

Asia-Pacific is very different. It varies by market. Some of the labour strife that you may have seen here in India may have different reasons as compared with South Africa. These are based on the infrastructure situation and colloquial atmosphere. So, in different markets we have different reasons and it’s all kind of treated differently. For wages, we have “One Ford" strategy to One manufacturing strategy. All our processes and supply base are rather same. We watch, observe and not only try to understand some of the issues that are going on but also react to it.

Close