Ford firms up plans for made-in-India engines3 min read . Updated: 02 Oct 2015, 01:08 AM IST
From 2017, made-in-India Panther engines will be fitted in SUVs such as the Endeavour in India, while Dragon will power all the firm's small cars made
New Delhi: Ford Motor Co. has identified India as one of the countries where it will manufacture two families of engines, code-named Panther and Dragon, which will power several of its products globally, according to two people familiar with the development.
From 2017, made-in-India Panther engines will be fitted in sport utility vehicles (SUVs) such as the Endeavour in India, while Dragon will power all the company’s small cars made here. Panther will also power a multi-utility vehicle in India that Ford plans to develop to compete with Toyota Kirloskar Motor Pvt. Ltd’s Innova.
Detroit-based Ford also plans to invest as much as $800 million in India as it looks to integrate its two entities in the country.
A company spokesman in India declined to comment in an email.
Ford operations in India also include global business services, with offices in Chennai, New Delhi and Coimbatore. Registered as Ford Motor Pvt. Ltd, the global business services unit provides solutions to Ford offices around the world in the areas of information technology, product engineering, finance and accounting, automotive financing, material, planning and logistics, marketing, sales and service, analytics, and purchasing.
Ford India Pvt. Ltd is the entity that makes and sells its products in India.
“The new investments will also go in expanding the company’s Chennai facility and setting up a new engineering centre," said a person familiar with the development.
Under those plans, Ford plans to acquire a 28 acre plot in Chennai, which will house its integrated offices. The announcement with effect to the new investments is likely to be made in the next six months
“Beyond the $2 billion already invested in India till now, Ford has been in discussion with the government of Tamil Nadu and signed a MoU (memorandum of understanding) for augmenting manufacturing capacity and establishing a new global engineering and technology centre in Chennai. Once finalized, the 28 acre Ford campus will create thousands of new jobs and harness India’s immensely talented workforce," the spokesman said.
With the two Ford entities combined, the company currently employs 14,000 people in India. Of these, Ford Motor Pvt. Ltd employs around 6,500 people.
Panther is a 2.2-litre diesel engine that will be locally assembled in India, and will power Ford’s SUV Endeavour. Currently, the vehicle is powered by a 2.5-litre diesel engine in the manual transmission and a 3-litre diesel engine in automatic transmissions.
“Starting 2017, with the new engine, Ford expects to sell 1,000 units of Endeavours every month in the country," said a person who has a business interest with the company.
Dragon is a 1.2-litre petrol engine that is being developed in India with a clear mandate of improved fuel efficiency. The current 1.2 litre petrol engine that power Ford’s cars such as Figo and Aspire have been criticized for low fuel efficiency.
“The upgrades of both these cars will come with the new engine in 2017," said the person cited at the second instance.
Together, these made in India engines will power 270,000 vehicles globally every year.
Ford has invested over $2 billion in India to set up two plants, one each in Chennai and Sanand in Gujarat. Together, these plants could make 610,000 engines and 440,000 passenger vehicles annually.
According to Abdul Majeed, partner and auto practice leader at PricewaterhouseCoopers, the move is aimed at sustaining the company’s business in India.
“Like most OEMs (original equipment manufacturers), Ford is heavily invested in India for a long time and they will have to look for ways to start making money in the country," Majeed said. “Exports seem like one viable option."
During the year ended 31 March, Ford exported 81,703 vehicles, an increase of 70% from the year-ago period, while total passenger vehicle exports from the country grew 4.42% to 622,470 units.
Only Hyundai Motor India Ltd, Maruti Suzuki India Ltd and Nissan Motor India Pvt. Ltd exported more cars than the American company.
During the period, Ford’s sales in the domestic market contracted 11.1% to 75,138 units, while the India passenger vehicle market grew 3.9% to 1.6 million units.