Joginder Singh, president and managing director of Ford India, is bullish on India, despite a sluggish automobile market. He talks to Hrishikesh Joshi on the expansion plan and other issues. Edited excerpts:
Did you expect the EcoSport to do so well in India?
After the Figo, the EcoSport seems to be another game changer for Ford India. The SUV (sports utility vehicle) has received unprecedented demand. Ford has delivered 25,000 units since the launch in June and the number of bookings is 60,000. The SUV, currently being made in Brazil, China and India, will also soon be made in Thailand and Russia. The waiting period for the variants ranges from three to five months. Due to heavy booking of the one-litre Ecoboost petrol variant, which gives 20-25 per cent more fuel efficiency, we have stopped further bookings of this model. We did expect it to do well, as it has been received well in other markets, too.
But you had to recall the diesel variant of the new EcoSport.
Quality is the key element for us. In the EcoSport, the problem was with the glow plug and it has been relocated to the other part of the engine, so the issue is rectified. To avoid such issues in future, we are working on a skill development programme and strengthening our research and development team.
Considering the demand for Ford vehicles, here and abroad, how are you managing the supplies? What is the expansion plan?
At present, it is difficult to manage both because we have a very complex supply chain system. Though our priority is the domestic market, we are not neglecting export markets. India will be the third largest market in the world after China and the US by 2020 and we will be ready for a growing market. Hence, the company is investing $2 billion in India over the next two years, including $1 bn for its second largest facility, at Sanand in Gujarat. Over 50 per cent of the work is completed at Sanand and it will be operational by the end of 2014. With this, the company will have a capacity to produce 440,000 cars and 610,000 engines annually. Also, Ford would add 5,000 staffers to the already existing 11,700 across India in all its operations by the end of next year. At present, our Chennai plant has an installed capacity to produce 200,000 cars and 340,000 engines annually.
You had said India will be an export hub for the company.
India is planned as an export hub. At present, 25-30 per cent of our cars (Figo, Classic, Fiesta, Endeavour and EcoSport) and 40 per cent of engines are exported to 37 markets in the Asia-Pacific, West Asia and Africa. We plan to expand our overseas geographies to 50 markets over the next three-four years, reaching Australia, New Zealand, Taiwan, Latin America, Mexico, Europe and other countries.
What about dealer expansion?
To support the growing number of our vehicles on Indian roads, the dealer network has expanded to 265 sales and service outlets in 142 cities across India. We're planning to increase the number of its sales and service network to 500 by around mid-decade.