Ford's project B562 to make India a compact car global production base

Mumbai: US carmaker Ford Motor Company is making India as a compact car global production base once its Sanand plant in Gujarat comes on stream in 2014, under a project codenamed B562 that may spawn three different compact cars from the same platform.

ET learns the move is part of Ford's larger global production restructuring plan which places greater responsibility on India versus its other base in Europe and across the world. Four people close to the development told ET, a project codenamed B562 is currently under development.

A small hatchback, a sub-4 metre sedan and a midsize compact sedan are being considered to be rolled out over the next two three years.

The development work of hatchback and mid-size compact sedan is gathering speed, however sub-4 metre sedan is still at a consideration stage, said people in the know of the development.

Underlining the growing significance of India as a base Alan Mulally, Global CEO of Ford Motor Company in a recent media interaction in India said, "The demand is dramatically down for cars in Europe, like it was in United States. So we are moving production, consolidating our facilities, but at the same time, we are accelerating the new vehicles. Customers want value, so it is going to take us a couple of years to finish that restructuring, we are doing the right thing for the customers and right thing for Ford,"

The hatchback may be placed alongside the existing Figo, the sub-4 metre sedan if given a go ahead will take on Maruti SuzukiBSE -3.00 % Dzire and Honda Amaze and the mid-size compact sedan will replace Fiesta classic. Globally the hatchback is expected to replace the Ka small car, people close to the company told ET.

"The company plans to produce over 2,00,000 cars on B562 platform by 2015-16 and over 30-50% is planned to be exported to the overseas markets over a period of time. The company tested the overseas markets with Figo, they now plan to aggressively expand exports with the EcoSport and with the B562 cars, the company intends to make the best use of its competitive production base in India," said one of the four people cited above on condition on anonymity.

When contacted, Ford India's spokesperson said, "We would not speculate about our future product strategy and business operations. Ford India's product-led transformation continues with the introduction of the EcoSport and currently we have a laser sharp focus to deliver it for our customers."

While the company terms EcoSport as a game changer, people involved with the company believe, the B562 is a even bigger deal. "The cars are being developed with an aim of garnering profits quicker than some of the earlier projects. In terms of volumes, the platform will deliver largest volumes for Ford India going ahead and is expected to come with a localisation level of over 90%."

According to V G Ramakrishnan, MD, Frost & Sullivan, South Asia, a big exports push helps Ford in not only getting the pricing right for the domestic market like it did with EcoSport, but it helps the company democratize some of the high end technology at affordable price.