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N. Ramakrishnan

Mr David E. Friedman, MD and President

Chennai , Nov. 11

FORD India Ltd hopes to end this year (calendar 2003) with a turnover of Rs 1,000 crore, up from Rs 800 crore in 2002. The higher turnover will be possible thanks to robust domestic sales, which will offset the expected decline in exports.

Domestic sales are expected to top the 20,000-mark this year against sales of 15,000 units in 2002, while exports are expected to fall to about 20,000 units (28,000 units).

Mr David E. Friedman, Managing Director and President, Ford India Ltd, told Business Line that there had been quite a good run over the last six months and the improved performance was seen across all sectors. "I am optimistic for next year," he said and added that there was every indication that the market would remain strong.

Mr Friedman did not think that Parliamentary elections next year would affect the economy. "You know the last time the market really grew at this sort of rate was during the last elections," he said. Indian consumers had proven capable of marching to their own beat. Consumer behaviour here was not tied to newspaper headlines and so some of the issues such as elections, drought, border conflict that in other places would have caused economic blips need not necessarily do so here, he said.

With Ford India's export markets - South Africa, Mexico and Brazil - being stagnant this year, the company was looking at other markets to export the Ikon. Ford India sends out the Ikon in completely knocked down kits to these three markets. All that Mr Friedman would say about the new markets was that they would be comparable economies to India.

Mr Friedman said Ford India was on track to start paying back its parent from next year. The company became cash flow positive last year and the next target was to achieve accounted profit. With sales volume going up, Ford India hoped to reach that target.

Ford India's working capital requirements were met internally and the launch of the Endeavour, the sports utility vehicle, was fully funded out of cash surplus, Mr Friedman said.

He pointed out that the bulk of investments had been made in the plant and any additional investment would be model-specific. Ford Motor Company would invest more money depending upon the launches, he said, declining to reveal how much this would be.

To a question, Mr Friedman said the present share holding in Ford India - Ford Motor Company 85 per cent and Mahindra & Mahindra the balance - would continue. Although Ford had obtained the Government approval to increase its stake to 92 per cent, it did not feel the need to do so now. Ford had a 6-per cent stake in M&M.

He said Ford and M&M frequently talked to each other, sat on each other's board. "Clearly there are insights into the Indian market that Mahindra offers. There is certainly communication on products and engineering between us. We have learnt a fair amount from each other," he said.

To a question, Mr Friedman said Ford India had so far granted Q1 certification (for quality, cost and delivery) to 10 of its vendors and an equal number were going through the process now.

Ford India manufactures the Ikon three-box car at its plant at Maraimalai Nagar, about 50 km south of Chennai, and sells the Mondeo, luxury car, imported from Ford's plant in Belgium. It will assemble the Endeavour at the plant here and sales are expected to commence in December. The plant has been set up with a total investment of Rs 1,700 crore.

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