Companies

Automaker Foton India buys time with new Borgward avatar

| Updated on: Jul 13, 2016

Surrenders 30 hectares at Chakan, but with a rider

Chinese automaker Foton’s India arm has just completed its transformation into Borgward Auto India, a move that will enable it to both buy time as well as rework its business plans in the country.

The change, of course, could involve bringing in cars to India under the Borgward brand, first as completely built units, and later Made-in-India cars. The idea is to eventually make India a production base for export to Asia, Africa and Latin America.

Borgward is a German car brand that has been out of production since it last built a car in 1961. It was resurrected in 2008 and is being nurtured to health by government-owned Beiqi Foton which has invested in it. The revived Borgward showcased its first new model, the BX7 SUV, last year, and the vehicle which was launched in Beijing a couple of months ago, is being built at a production line in Beiqi Foton’s plant in the Chinese capital.

In India, the Chinese company’s change of heart on product portfolio comes after five years of vacillating on whether or not to go ahead with a plan it had announced in 2011. It was to set up its first manufacturing base outside China near Pune and invest over ₹1,600 crore.

As per the original road-map, the first of the vehicles – mainly light and medium commercial vehicles – were to have rolled out by 2013, while the second phase was to have seen mini-trucks and mini-vans by 2016.

According to the new plan, for which the company has asked for a development period of five years, India will not only be a market to invest in but also for manufacturing and R&D outside of China in addition to being an export hub for Asia, Africa and Latin America. No details on investment have been shared.

Given that there is a serious industrial land crunch in and around Pune, and a long wait-list, a part of the restructuring exercise involves Borgward India agreeing to surrender 30 per cent of the 100 hectares that it had acquired at Chakan for the original project.

While the company maintains that this will be in lieu of an equal plot that will be allotted to it at Talegoan, lying west of the current location, a government official, who sought anonymity as he was not authorised to talk to the media, remains circumspect.

Published on January 17, 2018

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