The Sanand region in Gujarat is turning into a big automotive manufacturing hub. Tata Motors and Ford India are currently carrying out operations in that region and soon we will see Maruti Suzuki with their new facility. PSA Peugeot Citroen was also planning to set up a plant in Sanand but they have cancelled their India entry plans. Now global suppliers for Ford India are planning to setup their factories in Sanand. The vendors have already bought land at Sanand to install their new manufacturing facilities.
According to a government official, there are a total of 15 vendors that have taken up to 150 acres of land at Sanand in addition to Ford India’s plant. Ford India has given the vendors a deadline of mid-2014, post which they have to commence supplies from their new site. Vendors such as Getrag, Motherson Sumi and Magna International have begun the construction work at their respective sites. Getrag is known as one of the world’s largest suppliers of transmission but doesn’t have any India facility yet.
Once the vendors commence local supplies, the carmaker can price its products more aggressively as the localisation level will increase to a great extent and help them reduce costs. It is a good move by the automotive suppliers, as the import duties are on the higher side and inflation is fluctuating constantly. Ford India has just recorded their best ever sales yet, in July 2013, thanks to the aggressively priced EcoSport. The arrival of global vendors will further benefit Ford to keep production costs low and offer affordably priced products in the near future. Ford’s Sanand factory starts production in 2015.
Source – Business Standard