Ford, tamil nadu government sign agreement on $500 Million plant expansion investment

New Delhi, India, Sept. 24, 2009 –Ford Motor Company today formalized with the state government of Tamil Nadu its $500 million investment in expanding its presence in India, paving the way for volume production of the new Ford Figo revealed yesterday.

Signing an official Memorandum of Understanding with the government, Ford India reaffirmed its commitment to transform its plant located near Chennai to become a regional manufacturing centre of excellence for small cars and low-displacement engines.

The agreement was signed by Michael Boneham, president and managing director of Ford India, and Tamil Nadu's Principal Secretary, Industries Department, Government of Tamil Nadu, M.F. Farooqui.

The agreement was signed in the presence of Honourable Chief Minister of the State Dr. M. Karunanidhi and Dr. M K Stalin, Honourable Deputy Chief Minister. Alan Mulally, president and CEO, Ford Motor Company, John Parker, executive vice president, Ford Motor Company Asia Pacific and Africa, and Timothy J. Roemer, U.S. Ambassador to India, attended this historic moment.

“We’re pleased to put our pen to this agreement because it symbolizes our belief in the strong role India can play in the future of Ford Motor Company,” said Boneham. “Soon, with the introduction of the India-engineered and Chennai-manufactured all-new Ford Figo, the fruits of our expanded investment in Tamil Nadu will benefit the region in the form of expanded employment, both at the plant and among a growing local supply base.”

Ford, which established manufacturing facilities in Tamil Nadu in 1996, had previously announced the $500 million investment and its plant in located in Maraimalai Nagar has already undergone the first phase of its transformation. It is now being readied for volume production of the new Ford Figo revealed Sept. 23 in New Delhi by Mulally.

Central to Ford’s expanded investment in India has been the doubling of vehicle production capacity at Chennai plant with high-tech automation and eco-friendly production techniques. This paves the way for the debut of Ford Figo, which is expected to compete in the heart of the India car market and be exported to other regional markets, as well.

A new engine production facility, with a capacity of 250,000, is the final phase of the plant expansion. It will transform Maraimalai Nagar into the regional source for small displacement engines, serving not only production for the Indian market but across Ford’s Asia Pacific and Africa region.

Construction of the engine plant is well underway, with production coming on stream in 2010.

The Ford investment in Chennai’s regional development envisions a high degree of localization and a broader India supply base – boosted by the plant’s new export status and higher vehicle production expectations. The plant’s vehicle annual production capacity doubles to 200,000 units with the expansion, which includes 92 new robots and India’s first application of new eco-friendly painting process called Three-Wet High-Solids.

The plant is currently gearing up for volume production of the Ford Figo next year.