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,
Ford had revenues worth US$ 164.5 billion in 2003 Constant monitoring of its supplier base
Ford Ikon NXT, Ford Ikon 1.3 CLXi NXT, Ford
and is spread across 200 countries with over 327,000 Ford uses a monitoring system to ensure that
Ikon Sxi, Ford Ikon Flair
employees. suppliers adhere to high quality standards and deliver
• Ford launched ‘Flair’, at a price aimed at attracting
Ford sells vehicles under various brand names such as shipments on time. This gives it an assurance of the
the B Plus segment of car customers
Aston Martin, Ford, Jaguar, Land Rover, Lincoln, inventory management.
• Ford Mondeo comes in two different variants: Ford India follows its US parent Ford Motor
Mercury and Volvo.
Ford Mondeo, Ford Mondeo Ghia Company’s policy of sourcing components from Q1
In 1995, FMC established a joint venture company
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
Ford India set up its 250 acre manufacturing plant mark. Ford India has entered into a strategic tie-up Ford India’s facility is designed with a focus on
also launched Endeavour, in the sports utility vehicle
near Chennai with an investment of over US$ 354 with Hindustan Motors India Limited (HMIL), which scalability and speedy expansion in the future. With
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 Ford has implemented its global processes and
(IQS) Study, Ford Ikon ranked the highest in the
Ford India is a customer-centric company and has standards at its manufacturing facility in Chennai. For
entry mid-size segment as it did in 2001, achieving a
launched various promotion programmes to increase example, the processes used in the paint shop and
126 PP100.
its brand recall and customer satisfaction among Indian other facilities in India are just the same as in any
consumers. other plant in the world.
Challenges and success factors
• 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.
As a result, company sales grew by 41 per cent to
25,936 units in 2004.
• Improvement of distribution networks:
networks Ford
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.
• Entering smaller towns:
towns Ford has made
a foray into relatively small towns like
Allahabad, Gwalior and Trichy to reach
a larger number of customers.
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.
Ford India Pvt Ltd: AT A GLANCE
• Ford Motor Company: World’s second
largest automotive company. US$ 164.5
billion revenues. 327,000 employees. 200
countries
• 250 acre manufacturing plant near Chennai.
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

Leveraging the India Advantage
India’s IT advantage
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 web-
based 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.
As a back office hub
Ford Business Service Centre (FBSC) services the
accounting requirements of Ford Motor Company
source. Back-office hub. Export-base for cars
and components
As an export base for cars and components • Future plans, India: Increase exports from
Ford is leveraging the large, high-quality automotive Indian manufacturing plant. Double
supplier base of India and has made India its manufacturing capacity to 100,000 cars a year.
component-sourcing base. This has helped Ford to Expand distribution network across the
reduce the cost of manufacturing and also to increase 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.

US COMPANIES IN INDIA