Ford Motor's vision is to make India its export hub: Mark Fields, CEO

The Times of India

Byline: Ketan Thakkar & Satish John

Mark Fields, president and chief executive of Ford Motor, hopes that after two decades in India, the fortunes of its local unit may finally be changing, for the better. The 54-year-old with the looks of a Hollywood star is intensely combative. At a media interaction in Ahmedabad, he glared at a veteran motoring journalist who asked him about the project code for a new car platform. "What about it," he growled in mock anger, before breaking into a laugh. "It's a nice number," he quickly added and laughed again.

In India for the inauguration of Ford's car and engine manufacturing facility at Sanand, just outside Gujarat's Ahmedabad city, Fields gets serious when he talks about the local market and consumers. The Indian consumer is the "most discerning on this planet," he says. Ford, in India for almost two decades, is still finding its way. Unfazed by the past record, he explains the importance of India to Ford. "Last year we sold 6.6 million. Now when you look at the growth now and the end of the decade, almost 50% of the global growth will be in China and India, so you don't have to be a rocket scientist to guess, that you have to be successful in India," he said.

Speaking to ET's Ketan Thakkar and Satish John earlier, Fields borrowed a Spanish phrase to answer a question on how soon he expected the local venture to turn profitable: "Lo antes posible." And, he translated it for those who don't understand Spanish: "As soon as possible." Edited excerpts:

How important is the new plant in Sanand to Ford?

This is very important because India plays a very important role in our global growth plans. We are demonstrating our commitment to India and to grow here. We are investing for growth. We have invested over $2 billion (Rs 12,500 crore) in India in the past. At the same time, we are doubling our capacity on manufacturing. We will be able to produce over 4,40,000 vehicles in India, after we open the plant, and over 6,10,000 engines.Our vision is to make India our export hub. We want India to become a global centre of excellence for small vehicles, small cars and small displacement engines. Our vision over the next five years would be to triple our exports.

What are the opportunities to manufacture and export from India?

The reason it's home for me is we had an opportunity to meet with Prime Minister Modi, a couple of weeks after he took office. Nigel (Harris, Ford's India managing director) and I had a chance to visit him. We were telling him about our plans in India, and I asked him, how can Ford help India. He looked at me and he said, "I would appreciate if you could make India a good export hub for Ford." Our interests are therefore completely aligned. We are going to use India as an export hub, at the same time, we are going to create jobs here in the country. We will employ 2,500 people, at the new plant. When you add that to our existing workforce, we will have 14,000 people doing great work for us.

Does setting up a new plant also mean expanding your product portfolio in the country?

We are expanding our product portfolio and we are expanding the number of product segments we are going into. We are introducing three new products in the next 12-18 months and then finally we are increasing our product development capability. There is a tremendous engineering talent here and we want to tap into that and we will grow methodically over a period of time our product development capability here in India.

Ford has been in India for almost two decades. Yet, Ford has not been able to make profits here.

Our focus is to go forward, as against looking back. What you are seeing from us is, first, a commitment to India, as we are putting our manufacturing base together here. It is not only to serve the domestic market but also to serve the exports market and given that inherently developing markets are more volatile, this allows us to have flexibility that we never had before. Secondly, when you see the way we are developing products through one product strategy, developing global platforms, we don't have to rely on developing products here in the country. Instead, we can tap into global platforms and tailor them wherever necessary. For example, the new Figo Aspire is based on our global B platform, so you get the efficiencies, global engineering efficiencies and scale efficiencies of parts by tapping into our larger volume, but then you can do some tailoring, for instance. The Figo Aspire is going to be less than four metres, which is different from some of our B platform cars around the world because this is what the Indian customers want.

So our business model going forward will also include exports and tapping into global development process. So, it does change the game for us going forward and combine that with all the work that we are doing with our dealer network, to improve our distribution network. We have high hopes for the country going forward, as we change our business model.

Since you were personally involved in Ford's Premier Automotive Group that once owned Jaguar Land Rover and Volvo, how do you look at the sale of JLR to Tata Motors in hindsight?

When we went through the downturn, we had to make some fundamental decisions for the company. And this is near and dear to my heart as I ran the Premier Auto Group for some years. I had many friends in JLR, but we made a couple of key decisions, one was to focus on brand Ford. We had a number of different brands and we loved all those brands, but given where we were in that point of time in history, we had to focus on brand Ford. And based on that process, we went to sell JLR. Our ethos as a company is to do the right thing, and so unlike some of our competitors, who worked differently who ended up with different results.

We found a great partner and a great buyer in Tata, we have so much respect for the company and so much respect for Ratan Tata. I take a lot of pride that JLR is doing so well right now and you could always have hindsight, should we have kept them. I think it was the right decision for the time, I think, we sold to the right partner. They are successful now, and I think that gives us a lot of satisfaction.

Questions:

1. The case describes Ford Motor's plan to build a car and engine manufacturing facility located at Sanand in Ahmedabad city in India. Ford has been in India for two decades but has not made any profits yet. The plan is to use India as an export platform to serve China and other markets and expand the product offerings in India.

How does Ford's strategy in India fit into a transnational strategy framework?

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2. What local adaptations can Ford make in its cars to meet what Indian customers want?

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3. What advantages of setting up an export platform in India help Ford serve the emerging market economies?

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