Financial Daily from THE HINDU group of publications
Thursday, Aug 08, 2002
Ford India begins exporting auto parts to plant in China
CHENNAI, Aug. 7
FORD India Ltd today commenced exports of automotive components to the company's plant in China. It expects to export Rs 50-crore worth of components to China in calendar year 2003. (Ford Motor Company is setting up a plant at Chongqing in China as a 50:50 joint venture with Chongqing Changan Automobile Co Ltd. The joint venture, Changan Ford Automobile Corporation, will manufacture the Ikon and production is expected to commence in the next few months. Ford India makes the Ikon at its plant at Maraimalai Nagar, near here.)
The Ikon to be made in China will be similar to the car made in India except that it will be a left-hand drive. Over the last few months, several teams from Ford China have undergone training at Ford India's facilities on various aspects of stamping, body welding, assembly and quality engineering.
The Tamil Nadu Minister for Electricity and Industries, Mr Nainar Nagendran, today flagged off the first consignment of components at Ford India's plant.
Mr David E. Friedman, Managing Director and President, Ford India Ltd, told a press conference here that the exports to China demonstrated Ford India's ability to develop the export business on components also. The company was exporting completely knocked down kits of the Ikon to South Africa, Mexico and Brazil.
The components that will be exported from India to China include regulators, steering columns, horns, some chassis components, hinges, brackets, hoses, gearshift knob and smaller metal parts. A total of 169 different parts will be exported, which in value terms works out to $400-500 worth of components per car, Mr Friedman told a questioner.
With the components export to China, Ford India expects its total exports during 2003 to be about Rs 300 crore.
Answering questions, Mr Friedman said that Ford India was conducting road tests of Ford vehicles for global launches for harsh weather conditions here - extreme heat and heavy flooding.
The Kanchi advantage
THE recent Government notification declaring Kanchipuram district in Tamil Nadu as a place to establish export warehouses will benefit both Ford India Ltd and Hyundai Motor India Ltd, both of which are located in the district, besides a host of other companies that are looking at exports.
What this notification - issued at the instance of the Commerce Ministry - means is that the companies planning exports need not pay excise and other taxes upfront and claim reimbursement later. Normally, it takes a couple of months for the excise and other taxes to be reimbursed to the companies doing the exports. This frees up money for working capital and also saves enormous paperwork.
At a press conference on Wednesday, Ford India's Managing Director and President, Mr David Friedman, said the company expected to grow its CKD (completely knocked down) kit export operations further thanks to the notification.
This would reinforce Tamil Nadu as the leading export State for automobiles in the country.
This notification would not only help the larger companies such as Ford India and Hyundai Motor India, but also smaller companies as it saved them the hassle of having to pay the excise and later claiming reimbursement.
A number of component manufacturers are located in the vicinity of Ford India and Hyundai Motor India's plants at Maraimalai Nagar and Irungattukottai respectively.
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