FORD INDIA PVT. LTD. Background
new products in various segments as well as variants for existing products.
Ford Motor Company (FMC) is the world’s second largest automotive company after General Motors. Ford had revenues worth US$ 164.5 billion in 2003 and is spread across 200 countries with over 327,000 employees.
• Ford India sells Ikon in five variants viz. Ford Ikon, Ford Ikon NXT, Ford Ikon 1.3 CLXi NXT, Ford Ikon Sxi, Ford Ikon Flair • Ford launched ‘Flair’, at a price aimed at attracting the B Plus segment of car customers
Ford sells vehicles under various brand names such as Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mercury and Volvo. In 1995, FMC established a joint venture company with Mahindra & Mahindra (M&M) to assemble and distribute the Ford Escort, the company’s first model to be showcased in India. The company was rechristened Ford India in 1999, following a change in equity holding, with Ford buying out a majority stake. Ford India is a part of Ford Motor Company’s regional operating unit, Ford Asia Pacific (FAP). Ford India set up its 250 acre manufacturing plant near Chennai with an investment of over US$ 354 million. It today has the capacity to manufacture 100,000 vehicles per annum. In 2003, Ford India had about 900 employees and a turnover of over US$ 200 million.
• Ford Mondeo comes in two different variants: Ford Mondeo, Ford Mondeo Ghia • Ford launched Endeavour to cater to the Sports Utility Vehicle (SUV) market
High degree of localisation A high degree of localisation has enabled Ford to Ford is present in the C-Segment with the Ikon, and in the D-Segment with the Mondeo. Ford India has also launched Endeavour, in the sports utility vehicle segment. Ford ranked highest in the J.D. Power Asia Pacific 2003 Sales Satisfaction India (SSI) survey. In the J.D. Power Asia Pacific 2002 India Initial Quality Study (IQS) Study, Ford Ikon ranked the highest in the entry mid-size segment as it did in 2001, achieving a 126 PP100.
Challenges and success factors • Uncertainty and fluctuations in the Indian car market • Reluctance of Indian consumers to upgrade cars. Initially, this had resulted in lower than expected sales volume in the C-Segment. Ford India, however had a strategy to overcome these challenges.
Wide product portfolio To improve the appeal for its products and maintain product differentiation, Ford introduced
keep its manufacturing costs low. Ford India’s localisation programme has crossed the 90 per cent mark. Ford India has entered into a strategic tie-up with Hindustan Motors India Limited (HMIL), which manufactures engines and transmission units for the Ford Ikon at its Pithampur manufacturing facility.
Maintaining quality and customer satisfaction Ford India is a customer-centric company and has launched various promotion programmes to increase its brand recall and customer satisfaction among Indian consumers. • Ford India launched “Quality Care” in 2001 to provide superior after-sales-service from its dealer locations throughout the country. • Launched in 2000, “Ford Assured” is a venture in which Ford India dealers buy, recondition and sell various models of “used”” cars. • The quality of manufactured cars is ensured through a quality check program based on the principles of NOVA - C (New Overall Vehicle Audit - Customer) wherein daily random checks are conducted from a customer’s point of view.
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Routine calls are also made to Ford dealerships to check the quality of cars delivered to them.
Constant monitoring of its supplier base Ford uses a monitoring system to ensure that suppliers adhere to high quality standards and deliver shipments on time. This gives it an assurance of the inventory management. Ford India follows its US parent Ford Motor Company’s policy of sourcing components from Q1 certified vendors. Achieving the Q1 certification is a collaborative effort of Ford and its vendors. Ford India’s purchasing policy requires that all primary suppliers achieve TPM, TQM, ISO 9000, ISO 14000, QS and TS 1649 certifications.
Excellence in manufacturing Ford India’s facility is designed with a focus on scalability and speedy expansion in the future. With a unique plant design of an inverted ‘E’, the facility is capable of supporting volumes both for the domestic and the export markets. Ford has implemented its global processes and standards at its manufacturing facility in Chennai. For example, the processes used in the paint shop and other facilities in India are just the same as in any other plant in the world.
Reaching untapped markets Ford India has made improvements in its distribution
network to reach the markets with low penetration. As a result, company sales grew by 41 per cent to 25,936 units in 2004. networks Ford • Improvement of distribution networks: India shares equal branding with dealers. Ford India increased its number of dealers from 33 in 2001 to 90 in 2003 across 71 cities. Ford India was expected to have a presence in 105 dealer locations by the end of 2004.
globally, including its Asia Pacific region. FBSC is the global hub for Ford’s accounting. All accounts from all other regions are transferred to the centre, processed, and then sent back to the regional centres.
countries Investment of US$ 354 million. • Factors for success: Wide product portfolio. High degree of localisation. Constant monitoring of supplier base. Maintenance of quality and customer satisfaction. Excellence in manufacturing. Reaching untapped markets • For Ford, India is: Software development source. Back-office hub. Export-base for cars and components
India’s IT advantage
Ford Business Service Centre (FBSC) services the accounting requirements of Ford Motor Company
largest automotive company. US$ 164.5
• 250 acre manufacturing plant near Chennai.
Leveraging the India Advantage
As a back office hub
• Ford Motor Company: World’s second billion revenues. 327,000 employees. 200
towns Ford has made • Entering smaller towns: a foray into relatively small towns like Allahabad, Gwalior and Trichy to reach a larger number of customers.
Ford set up Ford Information Technology Services India (FITSI) in Chennai, which caters to the software requirements of Ford Motor Company in the region and around the world. FITSI develops solutions for Ford worldwide. For example, it developed a webbased customer relationship service for Ford India, Australia and South Africa. In addition, Ford has shifted the CAD/CAM development, e-mail processing and application development from its worldwide operations to India’s FITSI.
Ford India Pvt Ltd: AT A GLANCE
As an export base for cars and components Ford is leveraging the large, high-quality automotive supplier base of India and has made India its component-sourcing base. This has helped Ford to reduce the cost of manufacturing and also to increase
• Future plans, India: Increase exports from Indian
manufacturing
plant.
Double
manufacturing capacity to 100,000 cars a year. Expand distribution network across the country
its exports. Ford India awarded the Q1 supplier status to 10 suppliers, to help them export their products to Ford worldwide. Ford India exported 28,000 units of Ford Ikon in completely knocked down (CKD) form to South Africa, Mexico and Brazil in 2003. Ford has also exported Ford Ikon components worth over US$ 10 million per annum to China since 2002.
Future plans Following the launch of Fusion, its new car in 2004, Ford India now plans to increase exports from its Indian manufacturing plant. The company also plans to double its production capacity in India to reach a target of 100,000 cars a year and simultaneously expand the distribution network across the country.
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