To invest around Rs 5,000 cr; Maximum capacity at 4 lakh units a year

Ford Motor is expected to formally announce its second plant in Gujarat in a month or two, according to senior state Government officials who said the deal is in its “concrete stages”.

The US-based automaker, which has a manufacturing facility in Tamil Nadu, will give compatriot automaker General Motors company in Gujarat. At an investment of about Rs 5,000 crore, this plant is expected to have a capacity of four lakh units a year at full production levels.

“While a few automakers such as Peugeot and Hero Honda have had meetings with us, the deal with Ford and Maruti is in the concrete stages. Maruti has already announced its plans and Ford should take, at maximum, a month or two to finalise,” a State Government official told Business Line.

He added that the company is likely to choose a plot under the Gujarat Industrial Development Corporation that it was shown in Sanand. This plot is around 400 acres in area. Tata Motors has a dedicated plant for the Nano in the same region.

Gujarat, which has emerged as the poster boy for Indian industry of late, already has other investments from the automotive sector from companies such as General Motors (at Halol), truck maker Asia Motorworks (Bhuj) and Atul Auto (Rajkot).

“They (Ford) were shown three sites, one at Halol, another at Dholera and the third at Sanand. They are most likely to go for the third option because of good infrastructure and proximity to Ahmedabad. This site is also well connected by road and rail network,” said the official.

An industry expert said that Ford is likely to choose Gujarat because, apart from the infrastructure and positive investment climate, the State has two large ports — Mundra and Kandla — that can be utilised for exports. While the other traditional auto belts of Chennai and Gurgaon are currently facing labour strikes, Gujarat is known to have fared better in this regard. Ford may also look to make India a global manufacturing hub for its small-car range. Till now, Ford has invested about $600 million in India.

Apart from Gujarat, sources have also said that Ford had been previously evaluating Chakan, near Pune, in Maharashtra, as a possible site for its new plant. Automakers with investments in Chakan include Volkswagen, Bajaj and Mercedes-Benz.

(This article was published on June 22, 2011)
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