Ford Motor Company Announces $500 Million Investment To Expand India Operations

* Current manufacturing facility will be expanded to accommodate volume production of new small car
* A fully integrated and flexible engine manufacturing facility will produce petrol and next generation diesel engines for domestic and export markets

JOHN PARKER REMARKS: US$500 MILLION INVESTMENT TO EXPAND FORD INDIA OPERATIONS

Chennai – January, 2008 – Ford Motor Company today announced plans to invest US$500 million to expand its India operations, reaffirming its commitment to developing and implementing an aggressive growth strategy in the country. The new investment will fund several new initiatives, including the expansion of Ford India’s current manufacturing facility in Chennai to begin production of a new small car within the next two years, and construction of a fully integrated and flexible engine manufacturing plant that will go online by 2010.

The new investment increases Ford’s total financial commitment in India to more than US$875 million, and underscores its plan to elevate India as one of the strategic production hubs for small cars in the Company’s Asia Pacific and Africa region. In 2007, Ford announced a $500 million investment to build small cars in Thailand, just weeks after launching production of small cars at a new $510 million, state-of-the-art facility in Nanjing, China.

John Parker, executive vice president, Asia Pacific and Africa, said, "This new investment highlights the significance of India’s role in our continued expansion and overall strategy for the Asia Pacific and Africa region. We’ve developed a long-term and strategic plan for India that’s anchored on a substantial product program and new engine manufacturing facility.’

The overall investment plan for India has already commenced, and will be implemented in phases over the next three years. The first phase currently underway includes the addition of a diesel engine assembly plant at the Chennai site that will have an initial annual capacity of 50,000 units. The first engines are scheduled to roll off the line in April, and will be used in the local production of the Fiesta and Fusion to satisfy domestic demand.

A significant part of the investment will be utilized for the development of new product programs, primarily to expand the Chennai plant and accommodate volume production of the new small car. Production of the small car is scheduled to commence within the next two years, increasing our overall annual production at the expanded plant to 200,000 units by 2010.

“Ford India’s small car will be a worthy addition to the already successful and robust product mix that we offer to Indian consumers, and will further strengthen our competitive position in this increasingly dynamic market,” explained Arvind Mathew, president and managing director of Ford India.

The second major component of the investment plan is a new, state-of-the-art and fully-integrated engine manufacturing facility to be constructed adjacent to the current vehicle plant. This new flexible facility will be capable of manufacturing both petrol engines and Ford’s next generation diesel engine. Initial annual production capacity is planned for 250,000 units, with the first engines coming off line by 2010. Production at the diesel assembly plant that’s currently being set up will be integrated into the new facility.

“Our investment plan clearly signals Ford’s intent to implement an aggressive and comprehensive growth strategy for the India market. Reaching volume production of vehicles and engines will not only allow us to participate in the future growth of India’s auto industry, but really to help drive it, both in terms of domestic sale and export potential,” asserted Mathew.

The new facilities and capacity expansion will create more than 9,000 jobs – including 1,500 direct and 7,500 indirect jobs – as Ford India considerably increases its supplier base to meet the expanded production volumes. This, in turn, will compound additional investment by its suppliers and vendors and contribute to the overall growth of India’s auto industry.

“We’ll be significantly increasing our local sourcing to meet the requirements of our expanded production. One of the factors in deciding this investment was Ford’s confidence in the international standards and capabilities of India’s supply base,” said Mathew. “We’re also committed to the ongoing development of our own human resources, and we’ll be providing skills training for the additional work force.”

Ford India added 20 new authorized dealers to its network in 2007, bringing the total to 130 locations throughout the country. The Company plans to further expand its dealership base to accommodate the planned rise in domestic sales.

Ford will continue to introduce world-class customer service programs in India, such as the introduction of a 24-hour Ford Roadside Assistance Program in 2007, as well as professional service programs that include Ford’s Quality Care, Brand@Retail and Total Maintenance Plans.



Ford India Pvt. Ltd.
Established in 1995, Ford India is a wholly owned subsidiary of Ford Motor Company, a global automotive industry leader. Ford India manufactures and distributes automobiles made at its modern integrated manufacturing facility, at Maraimalai Nagar, near Chennai. With more than 2,000 employees, the Company’s models include the Ikon, Fusion, Endeavour and Fiesta. Ford India is in its eleventh year of operations in the country.

Ford India recently became the first Passenger Car Integrated Manufacturing Facility (OEM) to be accredited with the ISO / TS 16949: 2002 [with design] Certification. ISO/TS 16949:2002 aligns to American (QS-9000), German (VDA6.1), French (EAQF), Italian (AVSQ) and Asian Automotive Quality System Standards within the Global Automotive Industry. The process aims to eliminate the need for multiple certifications to satisfy customer requirements. In India, this certification is awarded by

For more information, visit www.india.ford.com