FORD INDIA PVT. LTD.

Background new products in various segments as well as variants Routine calls are also made to Ford dealerships Ford Motor Company (FMC) is the world’s second for existing products. to check the quality of cars delivered to them. largest automotive company after General Motors. • Ford India sells Ikon in five variants viz. Ford Ikon, Constant monitoring of its supplier base Ford had revenues worth US$ 164.5 billion in 2003 Ford Ikon NXT, Ford Ikon 1.3 CLXi NXT, Ford Ford uses a monitoring system to ensure that and is spread across 200 countries with over 327,000 Ikon Sxi, Ford Ikon Flair employees. suppliers adhere to high quality standards and deliver • Ford launched ‘Flair’, at a price aimed at attracting shipments on time. This gives it an assurance of the Ford sells vehicles under various brand names such as the B Plus segment of car customers Aston Martin, Ford, Jaguar, Land Rover, Lincoln, inventory management. • Ford Mondeo comes in two different variants: Mercury and Volvo. Ford India follows its US parent Ford Motor Ford Mondeo, Ford Mondeo Ghia In 1995, FMC established a joint venture company Company’s policy of sourcing components from Q1 with Mahindra & Mahindra (M&M) to assemble and • Ford launched Endeavour to cater to the Sports certified vendors. Achieving the Q1 certification is a distribute the Ford Escort, the company’s first model Utility Vehicle (SUV) market collaborative effort of Ford and its vendors. to be showcased in India. The company was re- Ford India’s purchasing policy requires that all primary christened Ford India in 1999, following a change in High degree of localisation suppliers achieve TPM, TQM, ISO 9000, ISO 14000, equity holding, with Ford buying out a majority stake. A high degree of localisation has enabled Ford to QS and TS 1649 certifications. Ford India is a part of Ford Motor Company’s regional keep its manufacturing costs low. Ford India’s Ford is present in the C-Segment with the Ikon, and operating unit, Ford Asia Pacific (FAP). localisation programme has crossed the 90 per cent Excellence in manufacturing in the D-Segment with the Mondeo. Ford India has mark. Ford India has entered into a strategic tie-up Ford India’s facility is designed with a focus on Ford India set up its 250 acre manufacturing plant also launched Endeavour, in the sports utility vehicle with Hindustan Motors India Limited (HMIL), which scalability and speedy expansion in the future. With near Chennai with an investment of over US$ 354 segment. million. It today has the capacity to manufacture manufactures engines and transmission units for the a unique plant design of an inverted ‘E’, the facility is Ford ranked highest in the J.D. Power Asia Pacific 100,000 vehicles per annum. In 2003, Ford India Ford Ikon at its Pithampur manufacturing facility. capable of supporting volumes both for the domestic 2003 Sales Satisfaction India (SSI) survey. In the J.D. had about 900 employees and a turnover of over and the export markets. Power Asia Pacific 2002 India Initial Quality Study US$ 200 million. Maintaining quality and customer satisfaction (IQS) Study, Ford Ikon ranked the highest in the Ford has implemented its global processes and Ford India is a customer-centric company and has entry mid-size segment as it did in 2001, achieving a standards at its manufacturing facility in Chennai. For launched various promotion programmes to increase 126 PP100. example, the processes used in the paint shop and its brand recall and customer satisfaction among Indian other facilities in India are just the same as in any Challenges and success factors consumers. other plant in the world. • Ford India launched “Quality Care” in 2001 to • Uncertainty and fluctuations in the Indian provide superior after-sales-service from its dealer Reaching untapped markets car market locations throughout the country. Ford India has made improvements in its distribution • Reluctance of Indian consumers to upgrade cars. Initially, this had resulted in lower than expected • Launched in 2000, “Ford Assured” is a venture in sales volume in the C-Segment. which Ford India dealers buy, recondition and sell various models of “used” cars. Ford India, however had a strategy to overcome these challenges. • The quality of manufactured cars is ensured through a quality check program based on the Wide product portfolio principles of NOVA - C (New Overall Vehicle To improve the appeal for its products and Audit - Customer) wherein daily random checks maintain product differentiation, Ford introduced are conducted from a customer’s point of view.

US COMPANIES IN INDIA network to reach the markets with low penetration. globally, including its Asia Pacific region. FBSC is the Ford India Pvt Ltd: AT A GLANCE As a result, company sales grew by 41 per cent to global hub for Ford’s accounting. All accounts from 25,936 units in 2004. all other regions are transferred to the centre, • Ford Motor Company: World’s second • Improvement of distribution networks:networks Ford processed, and then sent back to the regional centres. largest automotive company. US$ 164.5 India shares equal branding with dealers. billion revenues. 327,000 employees. 200 Ford India increased its number of dealers countries from 33 in 2001 to 90 in 2003 across 71 • 250 acre manufacturing plant near Chennai. cities. Ford India was expected to have a Investment of US$ 354 million. presence in 105 dealer locations by the end of 2004. • Factors for success: Wide product portfolio. High degree of localisation. Constant • Entering smaller towns:towns Ford has made a foray into relatively small towns like monitoring of supplier base. Maintenance of Allahabad, Gwalior and Trichy to reach quality and customer satisfaction. Excellence a larger number of customers. in manufacturing. Reaching untapped markets • For Ford, India is: Software development Leveraging the India Advantage source. Back-office hub. Export-base for cars and components India’s IT advantage • Future plans, India: Increase exports from Ford set up Ford Information Technology Services As an export base for cars and components India (FITSI) in Chennai, which caters to the software Ford is leveraging the large, high-quality automotive Indian manufacturing plant. Double requirements of Ford Motor Company in the region supplier base of India and has made India its manufacturing capacity to 100,000 cars a year. and around the world. FITSI develops solutions for component-sourcing base. This has helped Ford to Expand distribution network across the Ford worldwide. For example, it developed a web- reduce the cost of manufacturing and also to increase country based customer relationship service for Ford India, its exports. Ford India awarded the Q1 supplier status Australia and South Africa. In addition, Ford has shifted to 10 suppliers, to help them export their products the CAD/CAM development, e-mail processing and to Ford worldwide. application development from its worldwide Ford India exported 28,000 units of Ford Ikon in operations to India’s FITSI. completely knocked down (CKD) form to South Africa, Mexico and Brazil in 2003. Ford has also As a back office hub exported Ford Ikon components worth over Ford Business Service Centre (FBSC) services the US$ 10 million per annum to China since 2002. accounting requirements of Ford Motor Company 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.

US COMPANIES IN INDIA