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Ford expects exports to make Indian unit profitable by 2004
October 23, 2002
BY ANAND KRISHNAMOORTHY
BLOOMBERG
CHENNAI, India -- Ford Motor Co., the world's second-biggest automaker, expects its Indian unit to become profitable by 2004, helped by vehicle and parts exports to countries such as South Africa, Mexico and China.
Ford India Ltd., which lost 1.1 billion rupees ($23 million) in 2001, is also counting on exports to wipe out its cumulative losses by 2008, Vinay Piparsania, vice president of the company said in a telephone interview.
Ford, Hyundai Motor Co. and other automakers are exporting cars and parts to make their Indian units viable as vehicle sales in Asia's third-largest economy slowed in the fiscal year ended March 31, 2002. Ford India plans to sell 50,000 cars in 2002, almost 15 percent more than last year. Two-third of the sales would come from exports.
"Exports give us the necessary scale that we need," Piparsania said. "It is the key to capacity utilization and profitability of our operations."
The company, 85 percent owned by Dearborn, Michigan-based Ford, has invested 17 billion rupees setting up a factory near the southern port city of Chennai. It makes the Ikon sedan in the country and sells completely knocked down kits of the car to its units in South Africa and Mexico. It imports the Mondeo sedan for sale in the local market.
Export Benefits
Hyundai Motor, South Korea's No. 1 carmaker, in August said it will start selling the Santro minicar, made at its Hyundai Motor India Ltd. unit, to countries in Asia, Africa and Europe starting in July 2003.
India's second-biggest carmaker by sales aims to export about 50,000 to 60,000 units of the Santro in the 12 months starting June 1, 2003, compared with the 7,500 cars exported in the year ended March 31, 2002.
"There is a very large scope for exporting components from this country," Piparsania said. In August, Ford shipped its first set of components such as suspension and rubber parts to its Chinese factory. "In China, we plan to sell a car similar in size to the Ikon, for which we are shipping components from here."
Expanding the market for local production also benefits Indian parts makers as "the global volume means investments by the suppliers are viable," Piparsania said.
Earnings at companies such as Bharat Forge Ltd., India's biggest forging equipment maker, are improving with the help of exports of automobile parts from their Indian factories to Toyota Motor Corp. and DaimlerChrysler AG.
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Stacy94PGT
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid. 
My next Ford.....
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