Ford, The American Automaker Posts Profit For First Time In India

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Ford had entered our country back in 1995, and now after few years over two decades the automaker’s operations had posted a profit of in the year ended March 31. It is for the first time in history that Ford India sales scaled $1 biilion dollar during the year ended 31st March. Ford is using our country for the purpose of testing its so-called “Emerging Market Operating Model (EMOM)”, which essentially implies cutting costs wherever possible through alliances, local joint ventures, technology outsourcing, platform sharing, etc., the people said on condition of anonymity. Using India as a test bed will be profitable and help improve business for the automaker since India provides lower labour rates and joint ventures.

Ford, The American Automaker Posts Profit For First Time In India
Ford, The American Automaker Posts Profit For First Time In India

The results of the EMOM plan have already began to become noticeable. The programme has helped the American auto maker to cut down the structural costs by 40 percent. The EMOM plan has helped Ford grow its India business from $2.1 billion in 2015-16 to $2.8 billion in 2016-17 and $3.4 billion in 2017-18.A third person aware of the matter said “EMOM was first mooted by Ford and aims at comparing the true India cost with that of peers in the industry and benchmarks profitability and competitiveness to other automakers.”A spokesperson for the company confirmed the piloting of the EMOM strategy in India.

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The American automaker will launch two new sports utility vehicles and an electric car in collaboration with Mahindra and Mahindra in 2020 in the Indian auto markets. Together with that both the auto makers will jointly develop petrol engines as an indication of its restructuring of operations. This will in turn reduce the development costs of the vehicles. Moreover, the American manufacturer is struggling in the auto markets of China, Europe and South Africa, for these countries restructuring is necessary.

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“No one from Ford India operations will be moving to Chennai. However, my guess is that your source might be alluding to Global Business Services (GBS), a unit of Ford Motor Company in India, where the IT teams earlier based in Gurgaon will now be co-housed at Ford’s upcoming Global Technology and Business Center (GTBC),” the Ford India spokesperson said. A spokesperson for Mahindra said “any development that is ready to be shared will be done at an opportune time.”

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Source : Livemint



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