May 13, 2008 / 12:20 PM / 12 years ago

Ford Motor launches engine plant in India

MUMBAI (Reuters) - Ford Motor Co (F.N) has started operations at its engine assembly plant in India, the U.S. carmaker said on Tuesday, as it seeks a bigger share of the fast-growing market.

The plant, near Chennai in southern India, will initially make 60,000 engines annually for its Fiesta and Fusion models, starting with the 1.4-litre diesel Duratorq engines, it said.

Ford will first aim the 50,000 diesel and 10,000 petrol engines at the local market, and then export them. It will have an eventual capacity of 250,000 engines.

“This facility will help position Ford India as a strategic manufacturing hub for low displacement powertrain engines within our Asia Pacific and Africa region,” said Michael Boneham, president and managing director of Ford India.

“The domestic assembly of these engines will facilitate quicker time-to-market response, and greatly enhance the efficiencies of our operations,” he said.

With nearly 50 percent local content in the diesel engines, Ford will be able to compete more effectively in the Indian market, where annual passenger car sales are forecast to nearly double to 2 million units by 2010.

Ford India, which set up shop in India in 1995, said in January it would invest $500 million to double manufacturing capacity to 200,000 units by 2010 and make a small car to compete in the dominant segment of the market.

Leader Maruti Suzuki India Ltd (MRTI.BO), Hyundai Motor (005380.KS) and Tata Motors (TAMO.BO) have a lion’s share of the market for small cars presently.

Several others have also announced their intent to make small cars to take on the Tata Nano, priced at just above $2,500, and scheduled to go on sale later in the year.

Reporting by Rina Chandran; Editing by Ranjit Gangadharan

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