Bengal’s loss is Gujarat’s gain.
A little over a year since the factory for Tata Motors’ ambitious small car Nano was inaugurated, Gujarat is fast emerging as a prominent automotive hub in the country with major car and two-wheeler manufacturers flocking to the state with big-ticket investments.
US car major Ford Motor Corp on Thursday announced a Rs 4,000-crore investment towards setting up an integrated car manufacturing facility that will also have an engine plant at Sanand, the same region where the Nano plant is located. The facility would have a capacity to make 240,000 cars and 270,000 engines. This is the company’s second car plant in the country.
Ford is the fourth car company to set up a factory in the state after India’s largest carmaker Maruti Suzuki decided to set up a 350,000-unit plant in the state. The latter is still scouting for a suitable location.
Earlier, General Motors was the first car maker to set shop in the state with its plant at Halol. GM however, built its other plant at Talegaon in the neighbouring Maharashtra.
“There are many factors why we chose Gujarat over the others but the main reason is the demographics,” said Michael Bonaham, president and managing director, Ford India. “Investing in a western state gives us proximity to the North, which is the biggest market for cars. It helps bring down logistic costs. Further,
Gujarat boasts of good infrastructure and a sizeable port which works well for our export strategy.”
The two plants would be built on a 460-acre land with component suppliers expected to set up camp in the area surrounding it.
Already many suppliers have factories in the area for the Nano and many of them supply to Ford and Maruti as well.
“It did help us that the Nano factory is nearby, so a dedicated supplier base is already there,” Boneham added.
The added capacity is critical for Ford, which has chalked out ambitious growth strategy for India.
It will bring 8 new models into the country by 2015 and is banking on India to achieve its goal of increasing sales by 50% worldwide to 8 million vehicles per year by that time. Sixty to seventy of the growth is expected to come from Asia Pacific in the next 10 years.