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Kel Kearns is in charge of setting up the Sanand plant of Ford India. Despite the current slowdown in the automotive market, Ford' Sanand plant is on track to start rolling out cars next year. Vendors too have begun work. Kearns, director, manufacturing, Sanand vehicle assembly & engine Plant, Ford India, talks to Sohini Das at a community development at Motipura village near the upcoming plant, on how increased localisation could protect the company from ups and downs in the domestic market. Edited excerpts:
How is the Sanand plant coming along, when do you plan to start production?
We are in the process of acquiring maintenance people. We have already hired our first few batches of maintenance people, and would be soon hiring the third batch. We are training the ITI candidates for six months in LJ College in Ahmedabad. We have got a number yet to hire and the suppliers are coming after that. We now have around 300 people as part of the operational team here in Sanand. And around 3,000 people are working as a part of the construction team, but there are different agencies for that too like L&T, Shapoorji Pallonji, Kajima India among others. In the coming months, we would focus on building our operational team which would go up to around 3,000 people.
The domestic car market is not doing well. With additional capacity coming onstream, will you be focussing more on exports from this plant?
The domestic market not doing well is actually a short term outlook. We believe in the longterm outlook for the domestic market. The industry now is about three million cars, in the short term we are expecting that to be around five million and by 2020, we are expecting that to be around nine million cars. So, the domestic market is still the prime focus, because second to China the Indian market shows the biggest growth potential in the world. And when it gets to nine million, it would be the third biggest market in the world after North America and Europe.
But, the reality is that things go up and down. So, in your business model, if you have an export component, that balances the business model. When you start small, you import and when the Indian rupee goes down, it hurts you a lot. But, with a bigger scale, you can localise more. Our localisation would be more than 90 per cent here. So, when the rupee goes down and you are exporting, you are actually better off. With a larger scale of operations, when the local market goes up and down, we are protected from that.
What are the products planned from the Sanand plant?
We brought a global product, Ecosport, to India. The next product that we would make would be based on the success of the Ecosport. As the market grows in India, our products would get better. We will be bringing in more global products here. Ford has four design centers, one each in Australia, North America, South America and Europe.
What is the status of the vendor park? Are you also working with tier-II vendors like in Rajkot?
I attended the ground breaking ceremony on September 5 for Cooper Standard, that's the first global vendor to start work. They make fuel pipes and brake pipes and rubber seals. And now, other companies will start soon, like JBM, Cosma. Within the months of September and October they will start their facility construction and by the middle of next year they would be ready. Vendors were waiting for the monsoons to get over to start work on site. We work with tier-I suppliers, and they, in turn, work with tier-II and tier-III suppliers.
With the Sanand plant, Ford's net investment in India would be a couple of billion dollars. With such strong commitment, how do you see India story taking shape?
What we do is on a very large scale, its not local, its international. A large portion of our products will be exported. And that's a change now, in terms of Ford's participation here in India.
In India, we started small, like we always do. In every country in Asia, we have done the same thing. We have started with a small plant, imported most of the parts and made a name for itself through our products, and grew bigger and bigger till a point where we could invest on a larger scale on a bigger plant. What happened here is, we chose a place that didn't have infrastructure, and wasn't a vehicle hub and now one is being created. But, this decision is not a one or two or ten year decision, its a hundred year decision. Like our plant in Australia; we built it in a city called Geelong and over the years it grew, and over the years, Ford and Geelong became the same thing. People who are working in the plant, their father worked there, and for some their father's father worked there. We created this culture of connectivity. And if things go well, we can do the same here, and it would be a positive thing for the community. In Geelong, there is so much passion for Ford, that's because, its part of the society.
In Geelong, we started small, we would import parts from the US. And over the years it grew, and the community grew around it. Geelong is not a big city, its a satellite town. And the same can be said about Sanand, its a small town with villages surrounding it. The same story can happen here.
How has been your experience of working in India?
This is my third year in India. Last twelve years I have been in looking after Asia Pacific, but based in Australia. So, its been a travel job. I have been to China, Thailand, Japan and South Africa and Vietnam. I have been in Asia a long time. My first year in India I was in Delhi, because our head office is there. It is very diverse indeed. For an outsider, the diversity wasn't very evident initially. But, now I realise some of the differences.
