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Our Bureau

New Delhi, Nov. 5 Despite the tightening credit situation in the automotive industry, Ford India said on Wednesday that its expansions plans, including the $500-million outlay for its Indian operations, are firmly on track.

“The credit crunch has impacted buyer confidence for the short-term period but has not affected our long-term plans,” Mr Michael Boneham, Ford India President and Managing Director, told reporters here.

Earlier this year, the company had announced an investment of $500 million in India for a new engine and transmission plant in Chennai and development of a small car to be launched by 2010.

“Ford is confident that we will be a big part here. Our capacity enhancement programme and the small car project will continue as announced earlier,” he said.

On the investment the company has undertaken, Mr Boneham said the carmaker’s integrated engine plant in Chennai, which will have an installed capacity of 250,000 units a year by 2010, is already churning out 60,000 engines annually.

The plant will be its first outside Europe and will make low-displacement engines for cars to be rolled out of its Indian plant for both domestic market and exports.

The company’s existing $26-million diesel engine assembly plant, with a capacity for 50,000 diesel and 10,000 petrol engines for Fiesta and Fusion, would be eventually integrated with the new plant.

Ford India has the capacity to assemble some 1,00,000 cars annually at its facility here, which will be doubled to 2,00,000 by 2010.

On the sales, he said, “We expect the next year to be a tough one for the industry with a single digit growth. Our company is also expecting the same but we expect the new Ikon playing a key role to tide through the tough phase,” Mr Boneham said.

Noting that the small car would cater not only to the domestic demands but would also look for exports, he said the company would not shelve its small car project, announced last year.

“We will launch the small car by 2010, we will also go forward with other product launches in the next fiscal despite low growth,” he said.

The company launched the new petrol and diesel variant of its entry-level sedan – Ikon, priced at Rs 4.59 lakh and Rs 5.19 lakh (ex-showroom, Delhi) respectively.

The diesel variant of the new Ikon would come with a 1.4 litre DuraTorq TDCi engine, while the petrol variant would be available with a 1.3 litre RoCam engine.

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