Ford Motor Co. India have started operations are their new plant in Chennai, as it seeks a bigger share of the fast growing Indian car market. The plant has been strategically located near its carmaking facility in Chennai.

The new plant at present has the capacity to make 10,000 1.6 Duratec petrol engines and 40,000 1.4 Turbodiesel Duratorq diesel engines that currently do the duty in the Fiesta Sedan and the Fusion. The current capacity of the plant is intended only for the Indian car market. The plant is a flexible unit and the production can be shifted to 1.6 petrol engine based on demand.

Speaking to reporters at Ford’s assembly plant at Maramalai Nagar, near Chennai today, Micheal Boneham, president and managing director, Ford India said the company added 25 new local suppliers, includes 15 Chennai-based companies, to support the new diesel engine unit. 

He said that Ford India will save 15-20 per cent in cost and enhance turnaround time by setting up the local diesel engine production facility. With nearly 50% local content in the diesel engine they will be able to price their products more effectively in the Indian market, which Ford expects to double to 2 million units by 2010.

Ford will also make further inverstments to the tune of $500 million to double the capacity of its plant to around 200,000 units and launch a small car which is the most voluminous and dominant part of the Indian market. The engine plant will have an eventual capacity of 2.5 lakh units in which case it would become the hub for markets in Asia Pacific and Africa by 2010.