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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 rechristened 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. new products in various segments as well as variants for existing products. • Ford India sells Ikon in five variants viz. Ford Ikon, Ford Ikon NXT, Ford Ikon 1.3 CLXi NXT, Ford Ikon Sxi, Ford Ikon Flair • Ford launched ‘Flair’, at a price aimed at attracting the B Plus segment of car customers • Ford Mondeo comes in two different variants: Ford Mondeo, Ford Mondeo Ghia • Ford launched Endeavour to cater to the Sports Utility Vehicle (SUV) market Routine calls are also made to Ford dealerships to check the quality of cars delivered to them.
Constant monitoring of its supplier base
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.
High degree of localisation
A high degree of localisation has enabled Ford to 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. keep its manufacturing costs low. Ford India’s localisation programme has crossed the 90 per cent mark. Ford India has entered into a strategic tie-up with Hindustan Motors India Limited (HMIL), which manufactures engines and transmission units for the Ford Ikon at its Pithampur manufacturing facility.
Excellence in manufacturing
Ford India’s facility is designed with a focus on scalability and speedy expansion in the future. With a unique plant design of an inverted ‘E’, the facility is capable of supporting volumes both for the domestic and the export markets. Ford has implemented its global processes and standards at its manufacturing facility in Chennai. For example, the processes used in the paint shop and other facilities in India are just the same as in any other plant in the world.
Maintaining quality and customer satisfaction
Ford India is a customer-centric company and has launched various promotion programmes to increase its brand recall and customer satisfaction among Indian consumers. • Ford India launched “Quality Care” in 2001 to provide superior after-sales-service from its dealer locations throughout the country. • Launched in 2000, “Ford Assured” is a venture in which Ford India dealers buy, recondition and sell ” various models of “used” cars. • The quality of manufactured cars is ensured through a quality check program based on the principles of NOVA - C (New Overall Vehicle Audit - Customer) wherein daily random checks are conducted from a customer’s point of view.
Challenges and success factors
• Uncertainty and fluctuations in the Indian car market • Reluctance of Indian consumers to upgrade cars. Initially, this had resulted in lower than expected sales volume in the C-Segment. Ford India, however had a strategy to overcome these challenges.
Reaching untapped markets
Ford India has made improvements in its distribution
Wide product portfolio
To improve the appeal for its products and maintain product differentiation, Ford introduced
US COMPANIES IN INDIA
Australia and South Africa. The company also plans to double its production capacity in India to reach a target of 100. This has helped Ford to reduce the cost of manufacturing and also to increase its exports. processed. Ford India now plans to increase exports from its Indian manufacturing plant. which caters to the software requirements of Ford Motor Company in the region and around the world. Maintenance of quality and customer satisfaction. its new car in 2004.5 billion revenues. India is: Software development source. Reaching untapped markets • For Ford. India: Increase exports from Indian manufacturing plant.000 units of Ford Ikon in completely knocked down (CKD) form to South Africa. All accounts from all other regions are transferred to the centre. 327. In addition. FBSC is the global hub for Ford’s accounting. Back-office hub. Constant monitoring of supplier base.network to reach the markets with low penetration. Ford India increased its number of dealers from 33 in 2001 to 90 in 2003 across 71 cities. • Improvement of distribution networks: Ford networks India shares equal branding with dealers. and then sent back to the regional centres. Expand distribution network across the country Leveraging the India Advantage India’s IT advantage Ford set up Ford Information Technology Services India (FITSI) in Chennai. • Entering smaller towns: Ford has made towns a foray into relatively small towns like Allahabad. Gwalior and Trichy to reach a larger number of customers.000 cars a year and simultaneously expand the distribution network across the country. As a back office hub Ford Business Service Centre (FBSC) services the accounting requirements of Ford Motor Company Future plans Following the launch of Fusion. it developed a webbased customer relationship service for Ford India. to help them export their products to Ford worldwide. globally. Export-base for cars and components • Future plans. As an export base for cars and components Ford is leveraging the large. including its Asia Pacific region.000 cars a year. Ford India was expected to have a presence in 105 dealer locations by the end of 2004. Double manufacturing capacity to 100. Investment of US$ 354 million. High degree of localisation. Ford has shifted the CAD/CAM development. company sales grew by 41 per cent to 25. US$ 164. • Factors for success: Wide product portfolio. 200 countries • 250 acre manufacturing plant near Chennai.000 employees. For example. Ford has also exported Ford Ikon components worth over US$ 10 million per annum to China since 2002. US COMPANIES IN INDIA . e-mail processing and application development from its worldwide operations to India’s FITSI.936 units in 2004. Ford India Pvt Ltd: AT A GLANCE • Ford Motor Company: World’s second largest automotive company. Excellence in manufacturing. high-quality automotive supplier base of India and has made India its component-sourcing base. Ford India exported 28. Ford India awarded the Q1 supplier status to 10 suppliers. Mexico and Brazil in 2003. FITSI develops solutions for Ford worldwide. As a result.
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