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Ford India Pvt. Ltd FORD INDIA PVT. LTD. Background 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 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 re-christened 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 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. FORTUNE 500 COMPANIES IN INDIA PAGE 80 Challenges and success factors High degree of localisation • Uncertainty and fluctuations in the Indian A high degree of localisation has enabled Ford to car market keep its manufacturing costs low. Ford India’s • Reluctance of Indian consumers to upgrade cars. localisation programme has crossed the 90 per cent Initially, this had resulted in lower than expected mark. Ford India has entered into a strategic tie-up sales volume in the C-Segment. with Hindustan Motors India Limited (HMIL), which Ford India, however had a strategy to overcome these manufactures engines and transmission units for the challenges. Ford Ikon at its Pithampur manufacturing facility. Wide product portfolio Maintaining quality and customer satisfaction To improve the appeal for its products and Ford India is a customer-centric company and has maintain product differentiation, Ford introduced launched various promotion programmes to increase new products in various segments as well as variants its brand recall and customer satisfaction among Indian for existing products. consumers. • Ford India sells Ikon in five variants viz. Ford Ikon, • Ford India launched “Quality Care” in 2001 to Ford Ikon NXT, Ford Ikon 1.3 CLXi NXT, Ford provide superior after-sales-service from its dealer Ikon Sxi, Ford Ikon Flair locations throughout the country. • Ford launched ‘Flair’, at a price aimed at attracting • Launched in 2000, “Ford Assured” is a venture in the B Plus segment of car customers which Ford India dealers buy, recondition and sell ” • Ford Mondeo comes in two different variants: Ford various models of “used cars. Mondeo, Ford Mondeo Ghia • The quality of manufactured cars is ensured through • Ford launched Endeavour to cater to the Sports a quality check program based on the principles of Utility Vehicle (SUV) market NOVA - C (New Overall Vehicle Audit - SUCCESS STORIES PAGE 81 Customer) wherein daily random checks are As a result, company sales grew by 41 per cent to conducted from a customer’s point of view. Routine 25,936 units in 2004. calls are also made to Ford dealerships to check • Improvement of distribution networks: Ford India the quality of cars delivered to them. shares equal branding with dealers. Ford India increased its number of dealers from 33 in 2001 Constant monitoring of its supplier base to 90 in 2003 across 71 cities. Ford India was 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. expected to have a presence in 105 dealer locations Excellence in manufacturing by the end of 2004. Ford India’s facility is designed with a focus on scalability • Entering smaller towns: Ford has made a foray and speedy expansion in the future. With a unique into relatively small towns like Allahabad, Gwalior plant design of an inverted ‘E’, the facility is capable of and Trichy to reach a larger number of customers. supporting volumes both for the domestic and the export markets. Leveraging the India Advantage Ford has implemented its global processes and standards at its manufacturing facility in Chennai. For India’s IT advantage example, the processes used in the paint shop and Ford set up Ford Information Technology Services other facilities in India are just the same as in any India (FITSI) in Chennai, which caters to the software other plant in the world. requirements of Ford Motor Company in the region and around the world. FITSI develops solutions for Reaching untapped markets Ford worldwide. For example, it developed a web- Ford India has made improvements in its distribution based customer relationship service for Ford India, network to reach the markets with low penetration. 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. As a back office hub Ford Business Service Centre (FBSC) services the accounting requirements of Ford Motor Company globally, FORTUNE 500 COMPANIES IN INDIA PAGE 82 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. 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 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. SUCCESS STORIES PAGE 83.
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