The Hindu Business Line : Ford retires high-cost debt; Fusion launch likely in Nov

SNAZZY LINE-UP: Mr David Friedman, Managing Director and President, Ford India, at the launch of Ikon line-up in Bangalore on Tuesday. - G.R.N. Somashekar

Bangalore , Aug. 10

FORD India has retired high cost debt worth a total of Rs 200 crore taking advantage of the prevailing softer interest rates, while it has turned the corner during the current fiscal.

The US-based automaker is also expected to launch its new car, Fusion, in November this year, which will take on competitors like Honda City, according to industry sources.

The 1.4-l Fusion will be fitted with Sigma series of engines instead of the Rocam engines currently fitted in Ikons.

The Ford India President and Managing Director, Mr David Friedman, told Business Line that the company has been able to get extremely good rates while retiring high cost debt but he did not disclose the new terms. Ford had raised Rs 100 crore each through debentures issues in 1999 and 2001.

Mr Friedman said the company was cash flow positive and immediate growth would be funded through internal accruals. Ford has, so far, invested around Rs 1,700 crore in the Indian venture in which it has an 85 per cent stake, while the rest is with Mahindra & Mahindra. Mr Friedman said with the start of the second shift in August, the company will start making profits. He said readiness for the second production shift included ramping up capacities of the supply base and an aggressive expansion of the distribution network across the country. Ford sold around 18,500 Ikons in 2003 and is expected to end the current year with a growth of 22 per cent. It recently added 700 more employees to its existing 600 employees to support the growing volumes and introduction of new models. During the first seven months of the current calendar year, Ford sold a total of 14,000 Ikons posting a growth of 52 per cent over the last year, same period.

The Ford India Vice-President for Marketing, Mr Vinay Piparsania, said exports will be around 24,000 units in 2004, the same as last year. Ford expects to cross the Rs 1,000-crore mark in revenues during the year. He said the cost of ownership had come down over a period of time. He said Ford had chalked out an aggressive distribution roadmap and plans to grow to 105 dealer outlets in 86 cities from the current level of 90 dealers in 71 cities. Meanwhile, Ford on Tuesday unveiled a new line of Ikons at a base price of Rs 4.49 lakh (ex-showroom). Ikon will have four new variants, which are Lxi, Exi and upgraded versions of Zxi and Flair. The price ranges between Rs 4.49 lakh and Rs 6.9 lakh.

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