The Hindu : Business : Expanded output to meet demand

Online edition of India's National Newspaper
Wednesday, Aug 11, 2004

Business

Business

Expanded output to meet demand

By K. T. Jagannathan

CHENNAI, AUG. 10. Enthused by the consistently encouraging 50 per cent year-on-year growth in sales, Ford India has decided to raise output by taking Ikon production in second-shift.

The company operates second-shift to produce vehicles for export as well to make the recently launched sports utility vehicle (SUV) Endeavour.

In a free wheeling chat with this correspondent, David Friedman, Managing Director of the company, said Ford India had added over 700 employees since January this year to meet the demand pressure, resulting in the commencement of second-shift operation at its plant.

Mr. Friedman said the company was gearing to produce over 200 Endeavour SUVs to bridge the demand gap. Currently, this vehicle had a waiting period of six-to-eight weeks, he said.

He claimed that the SUV sale had exceeded the initial target of 150 units a month.

The vehicle, he said, had a local content of around 20-25 per cent.

Mr. Friedman asserted that the company's exports were on track and would easily scale the 24,000 units shipped last year.

Queried on the rise in inflation number and its impact on the car industry, he said, "I think it is too soon to know if there is an impact.''

He reckoned that the inflation was driven by short-term factors such as fuel and commodity prices. "If we sustained higher inflation, then there will be higher interest rate. That will be negative for the industry,'' he added. Mr. Friedman was concerned that the competitive edge of the car industry would disappear over a period if some structural issues were not addressed

quickly. "We need an operative environment that is exposed to international standards,'' he said.

The Managing Director saw in the recent FTA (free trade agreement) with Thailand an opportunity.

"The India auto industry has an enormous base. I see the FTA as an opportunity to leverage this base and enter Thailand,'' he pointed out.

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