Wednesday, November 09, 2011, AutomotiveWorld.com
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» Sign upEncouraged by buyers' response to their recent car launches in India, the local arms of German auto maker Volkswagen AG and US-based Ford Motor Co. are exploring plans to reinforce their manufacturing capacity by setting up new plants to drive the new phase of growth. Both companies are seeking to set up new factories in northern India, said an official at the ministry of heavy industry. At present, Volkswagen has a manufacturing plant in Pune, Maharashtra, while Ford's production base is located near Chennai.
"People from both Volkswagen and Ford visited us today, expressing interest in setting up their new plants in the northern part of the country," the official said on condition of anonymity. Volkswagen, which in recent months launched the Polo hatchback and Vento sedan, and Ford have both seen sales post rapid growth in India this year. Ford, which this year launched the Figo hatchback, sold 79,586 units in the 11 months to November, compared with 27,906 units in the same period last year.Volkswagen sold 26,000 cars in the same period, a more than eight-fold increase from 3,000 a year ago. Both have ambitious growth plans lined up for India, Asia's third-largest car market, where car sales expanded 33.72% to 1,408,475 units in October, according to the Society of Indian Automobile Manufacturers. "With both Ford and Volkswagen having received a good response for their offerings, they will be facing a capacity constraint in the next three-five years," said Deepesh Rathore, managing director at IHS Automotive, a market intelligence firm. According to the ministry of heavy industry official cited above, Ford plans to invest around '4,000-5,000 crore in the plant with a capacity to turn out at least 200,000 units per year."They are looking to develop the new plant as the export hub, which will cater to other Asian markets," besides the local market, he added. Ford is likely to start building the plant in 2011 in the Delhi NCR region, he said. The official said the firm wants to tap more customers by having a manufacturing presence in the north. "They think that staying in Chennai may not help them in the long-term and having presence in the northern part of the country makes a lot of sense." Michael Boneham, president of Ford India Pvt. Ltd, declined to comment on the company's plans, but said that the company's Chennai plant was running to near full capacity. The company currently runs two shifts at its plant and is likely to add a third one soon, Boneham said. Ford plans to launch eight new models by 2015 in India. Volkswagen, meanwhile, is conducting a feasibility study on a possible new plant in northern states such as Punjab, Haryana and Uttar Pradesh, the ministry official said. A Volkswagen spokesperson denied the existence of any immediate expansion plans.Related News:
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