Ford Invested in Gujarat to Cut on Freight Costs, Says TN Govt

Chennai: Tamil Nadu government on Thursday said US car maker Ford had set up manufacturing facilities in Gujarat in 2015, after their first unit in this state, to "avoid logistics cost" and to serve North and Western parts of the country.

Responding to media reports that major investors like Ford had invested outside Tamil Nadu, the state government on Thursday said the reason cited by Ford to establish their factory in Gujarat was to provide "better logistics solution" and "service delivery mechanism."

"The approximate cost of logistics alone has been estimated at Rs 70 crore.. Thus, Ford Motor company invested in greenfield project in Gujarat only to avoid additional transport freight cost," a government release said.

The US Car maker, in 2015, had invested over USD 1 billion in two manufacturing facilities in Sanand, Gujarat spread across 460 acre.

The vehicle plant will have annual capacity of 2.40 lakh while engine plant at 2.70 lakh.

Ford had told the state government that 60 percent of its cars were sold in North and Western parts of the country. It was due to these reasons, Ford decided to invest in a project in Gujarat to meet the demand, the government said.

Even for the export of Ford cars, the company wanted to have another port apart from Ennore Port (near Chennai) and decided Gujarat port to be "feasible" and "commercially viable" option, the release said.

Last year, Ford had announced that it will invest Rs 1,300 crore to set up a Global Technology and Business Centre at Sholinganallur.

"This is the first and only Research and Development Centre set up (by Ford) outside United States of America," the release said.

"ELCOT (Electronics Corporation of Tamil Nadu) has alloted 28 acres for the project, which shall generate employment for over 12,000 persons directly and indirectly," an official release said.

Ford Motors India, which has manufacturing facilities in Maraimalai Nagar near Chennai has so far invested around Rs 4,500 crore with production capacity of two lakh cars and 2.50 lakh car engines.

The company employs about 5,000 people in Tamil Nadu, the release added.