DELHI, India – @Ford recently sat down with Joginder Singh, the recently-appointed president and managing director of Ford India, to discuss his vision and plans for the company in India.
Q: What is your vision for Ford India?
A: My vision for Ford India is to be India’s leading and most respected automotive company, fulfilling the aspirations of our customers, enhancing the lives of our employees, and enriching the communities in which we operate. There is tremendous goodwill for the Blue Oval in India and, wherever I travel in the country, I sense a great appreciation of the legacy and heritage of Ford Motor Company. Henry Ford’s vision of “opening the highways to all mankind” is so appropriate for India, where we are on the cusp of a take-off point that will make automobiles affordable for the masses.
We have an aggressive profitable growth strategy for India to help realize this vision over a period of time. With the plans we have in place, I believe we deserve to be in the upper echelons of Indian industry, and a respected corporate citizen of this great country.
Q: What plans do we have in place to help realize this vision that you described?
A: Our plan for India is a very comprehensive plan that leverages ONE Ford and is underpinned by the Global Brand Promise to provide products with Quality, Green, Safe and Smart attributes that Indian consumers want and value.
First, we have made a significant investment commitment to the India market -- within less than a decade we have raised our commitment here from USD 500 million to USD 2 billion. As you know, we are more than doubling our capacity in the country, with state-of-the-art world-class facilities in Chennai in Tamil Nadu and now in Sanand in Gujarat where we broke ground in 2012. Second, we will be bringing several new products from the ONE Ford stable to India over the next few years, and are really excited about the mid-decade outlook of our product plan.
Third, our global supplier partners are also expanding their footprint in India with their own investment, and developing greenfield sites in many cases. And, fourth, at the same time, we are expanding our dealer network in the country, concentrating in Tier 2 and Tier 3 cities, so that we can reach out to our customers and serve them better -- not that long ago, we had 125 dealers in the country, and by the end of last year, we had more than 250 sales and service outlets, and our plan is to double this number again, targeting 500 customer touch-points across the country by around mid-decade.
What I am describing to you are not incremental changes -- these are quantum leaps, which are unprecedented for Ford India. It is turbo-charged growth -- there is no other word to describe it.
Q: Tell us about the growth potential and the competitive environment in India. It seems like every automaker in the world wants a piece of the action.
A: Well, our projections are that, despite the current hiatus in the industry, the fundamental growth story for India is intact. We expect that, with the resumption of growth-friendly policies by the Government and re-building of consumer confidence, India will resume its strong growth trajectory. Last year, industry volume was just over 3 million units, and we project that by mid-decade the industry will increase to about 5 million units, and by 2020, the annual industry volume will touch 9 million units, making India the world’s third largest automotive market, behind China and the U.S. This is stupendous growth. Of course, we are not alone in figuring this out -- pretty much all the major players are present in India or have plans to enter or to build scale. So, we have a lot of company to contend with. There is so much organic growth in the industry and, with the right products and an affordable cost structure, we can turn this phenomenon into a profitable growth opportunity for all our stakeholders.
Q: So, given this environment, what does it take to be successful in India?
A: Well, I would describe India as a Ground Zero market. Indian consumers are very discerning and demanding -- they want great products that are fuel efficient, have low cost of ownership, are fun to drive, have lots of technology features, and represent great value for money. All of this has to be achieved at a very compelling price point -- the small car segment is the largest segment, comprising 70 percent of total industry sales.
Therefore, a “value” approach in every aspect of the business is necessary for profitable growth in the India market. Strong brand proposition, aspirational products, and a laser-like customer focus are key success factors. In addition, for India, the “playbook” must include large scale, frugal engineering, high levels of localization, and low structural cost. As we make this equation work in India, we would be well positioned for profitable growth in any market in the world -- that’s why I call India a Ground Zero market.
Q: India is talked about as an export hub. What role do exports play in the India “playbook” for Ford India?
A: We plan to leverage India as an export hub for both vehicles and engines. In addition to taking advantage of low cost and great productivity in our Tami Nadu facilities, exports have helped to build scale in our manufacturing operations, improved capacity utilization, and have reduced unit cost of production. The Indian currency has been very volatile, and serving both the domestic and export markets provides a natural hedge for the business.
We have great momentum in our export business. In fact, we witnessed the highest ever exports in Ford India’s history in December 2012. For the full year of 2012, our exports were up 35 percent from the preceding year. The Figo is being exported to 37 markets, and we will accelerate this momentum with the soon-to-be launched EcoSport.
When our second integrated facility in Gujarat becomes operational in 2014, our total production capacity will increase to 440,000 vehicles and 610,000 engines annually. We expect to export 20-25 percent of vehicles and as much as 40 percent of our engines -- it is gratifying to note that Chennai and Sanand-built products will be satisfying customers in several international markets.
Q: You have spoken about significant expansion and growth for Ford India. What does this mean in terms of employment opportunities? How does this impact our community development initiatives?
A: At present, we employ about 10,000 people in India in our operations in Tamil Nadu and Global Business Services. We expect to increase our total national employment to 15,000 people as our Sanand facility becomes operational in 2014. In fact, hiring is starting later this year in Gujarat. This number excludes the employees of our supplier partners and our dealer partners. In addition, studies have shown that automotive employment has a significant multiplier effect in terms of employment opportunities in the rest of the local economy. So, there is tremendous value-add for each dollar invested and for each job created in the local economies.
In keeping with the legacy and history of Ford Motor Company, and our vision of “Great Products, Strong Business, Better World,” in Ford India, we become “citizens” of the communities in which we operate. This naturally means that we acquire a great sense of social responsibility. There are many examples of how our employees have worked hard to address community needs, with a strong focus on women’s empowerment, educational infrastructure, digital literacy, and health and sanitation. Our employees go further in serving under-served communities, not just during the Global Week of Caring, but each day, every day of their work. We hope to continue this corporate citizenship spirit in Gujarat with the same vigor as we do in Tamil Nadu.
Q: You have been with the company for more than three decades. How does this long tenure help you in your job?
A: Well, first of all, it has been quite a ride for the last 30 years! I have served in Europe, the U.S., then in Canada, then back in the U.S., and now in India. Each role has been a great learning and personal development experience for me. Having lived through the economic cycles in different parts of the world, you begin to get an appreciation of how we have to be resilient, deal with adversity, and have stamina through the down cycle, to enjoy the ride back up. Also, I think I have a good appreciation of globalization in every sense of the word -- culture, business, scale, connectivity, interdependencies, and leadership.
Having witnessed the best of Ford in the different regions of the world, I think I can help bring this “best of Ford” to India, be it products, or technologies, or processes, or best practices or skills. In other words, bring to bear the global leverage of ONE Ford to India, so we can achieve a profitably growing business in India. I think I also have a role in providing an India point-of-view that reflects the ground realities, the competitive environment, and the consumer “head-set” of Indians, that can be incorporated in the Ground Zero “playbook” for India.
These are exciting times indeed for Ford in India. It is a privilege and an honor to lead this high-performing team in India, as we Go Further in delivering our Global Brand Promise to Indian consumers.
Dhanyavaad...and Namaste from India!