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Ford Motor’s vision is to make India its export hub: Mark Fields, CEO

March 26, 2015

Mark Fields, president and chief executive of Ford Motor, hopes that after two decades in India, the fortunes of its local unit may finally be changing, for the better. The 54-year-old with the looks of a Hollywood star is intensely combative. At a media interaction in Ahmedabad, he glared at a veteran motoring journalist who asked him about the project code for a new car platform. "What about it," he growled in mock anger, before breaking into a laugh. "It`s a nice number," he quickly added and laughed again.

In India for the inauguration of Ford`s car and engine manufacturing facility at Sanand, just outside Gujarat`s Ahmedabad city, Fields gets serious when he talks about the local market and consumers. The Indian consumer is the "most discerning on this planet," he says. Ford, in India for almost two decades, is still finding its way. Unfazed by the past record, he explains the importance of India to Ford. "Last year we sold 6.6 million. Now when you look at the growth now and the end of the decade, almost 50% of the global growth will be in China and India, so you don`t have to be a rocket scientist to guess, that you have to be successful in India," he said.
 
Speaking to ET`s Ketan Thakkar and Satish John earlier, Fields borrowed a Spanish phrase to answer a question on how soon he expected the local venture to turn profitable: "Lo antes posible." And, he translated it for those who don`t understand Spanish: "As soon as possible." Edited excerpts:
 
How important is the new plant in Sanand to Ford?
 
This is very important because India plays a very important role in our global growth plans. We are demonstrating our commitment to India and to grow here. We are investing for growth. We have invested over $2 billion (Rs 12,500 crore) in India in the past. At the same time, we are doubling our capacity on manufacturing. We will be able to produce over 4,40,000 vehicles in India, after we open the plant, and over 6,10,000 engines. Our vision is to make India our export hub. We want India to become a global centre of excellence for small vehicles, small cars and small displacement engines. Our vision over the next five years would be to triple our exports.
 
What are the opportunities to manufacture and export from India?
 
The reason it`s home for me is we had an opportunity to meet with Prime Minister Modi, a couple of weeks after he took office. Nigel (Harris, Ford`s India managing director) and I had a chance to visit him. We were telling him about our plans in India, and I asked him, how can Ford help India. He looked at me and he said, "I would appreciate if you could make India a good export hub for Ford." Our interests are therefore completely aligned. We are going to use India as an export hub, at the same time, we are going to create jobs here in the country. We will employ 2,500 people, at the new plant. When you add that to our existing workforce, we will have 14,000 people doing great work for us.
 
Does setting up a new plant also mean expanding your product portfolio in the country?
 
We are expanding our product portfolio and we are expanding the number of product segments we are going into. We are introducing three new products in the next 12-18 months and then finally we are increasing our product development capability. There is a tremendous engineering talent here and we want to tap into that and we will grow methodically over a period of time our product development capability here in India.
 
Ford has been in India for almost two decades. Yet, Ford has not been able to make profits here.
 
Our focus is to go forward, as against looking back. What you are seeing from us is, first, a commitment to India, as we are putting our manufacturing base together here. It is not only to serve the domestic market but also to serve the exports market and given that inherently developing markets are more volatile, this allows us to have flexibility that we never had before. Secondly, when you see the way we are developing products through one product strategy, developing global platforms, we don`t have to rely on developing products here in the country. Instead, we can tap into global platforms and tailor them wherever necessary. For example, the new Figo Aspire is based on our global B platform, so you get the efficiencies, global engineering efficiencies and scale efficiencies of parts by tapping into our larger volume, but then you can do some tailoring, for instance. The Figo Aspire is going to be less than four metres, which is different from some of our B platform cars around the world because this is what the Indian customers want.
 
So our business model going forward will also include exports and tapping into global development process. So, it does change the game for us going forward and combine that with all the work that we are doing with our dealer network, to improve our distribution network. We have high hopes for the country going forward, as we change our business model.
 
Since you were personally involved in Ford`s Premier Automotive Group that once owned Jaguar Land Rover and Volvo, how do you look at the sale of JLR to Tata Motors in hindsight?
 
When we went through the downturn, we had to make some fundamental decisions for the company. And this is near and dear to my heart as I ran the Premier Auto Group for some years. I had many friends in JLR, but we made a couple of key decisions, one was to focus on brand Ford. We had a number of different brands and we loved all those brands, but given where we were in that point of time in history, we had to focus on brand Ford. And based on that process, we went to sell JLR. Our ethos as a company is to do the right thing, and so unlike some of our competitors, who worked differently who ended up with different results.
 
We found a great partner and a great buyer in Tata, we have so much respect for the company and so much respect for Ratan Tata. I take a lot of pride that JLR is doing so well right now and you could always have hindsight, should we have kept them. I think it was the right decision for the time, I think, we sold to the right partner. They are successful now, and I think that gives us a lot of satisfaction.
 
Ford is often considered as a one product company in India. What are your aspirations for India?
 
Let me put into perspective our global objective. How does India fit into the global objective? Last year, we set our long-term goal and one of the long-term goals was to be top five in sales. We did not put a time frame on it, but we have laid out some end of decade markers, and one of our markers was to grow the sales of the company by 45-50% as against today. We want to grow to 9.6 million in sales. Last year we sold 6.6 million. Now when you look at the growth now, and the end of the decade, almost 50% of the global growth will be in China and India, so you don`t have to be a rocket scientist to guess, that you have to be successful in India.
 
So this is why it is important for us to be successful and then to grow here in India. Secondly, the good news is that we know how to make winning products, which Indian consumers are going to value. The opportunity for us is to do it more on a regular basis... Beyond that we will continue to look at the trends, look at the segment, where it makes sense for us to participate in, and over time, you will see us growing our presence in this market. But very deliberately and very methodically.
 
Many emerging markets like Brazil, Russia and India have let down many of the global car makers in the recent past. How do you see their future?
 
Let`s put it into perspective. When you look at the BRIC (Brazil, Russia, India and China) markets for example, Brazil is going through a tough time right now. Their economy is down, as it is heavily commodity based. They are going through tough times, but in the period from 2003 to 2013, we made a lot of money in Brazil ... Inherently developing markets are volatile, we have been in many of these markets for many years, so we take a long view, so there will be period of time, when the economy is very tough and challenging, we continue to invest in new products, because the demand goes through various cycles. Brazil and Russia are in one of their down cycles right now. China has been on an upper trajectory for a number of years. Many of you saying, the economy is not growing at 7.5% and at 7%. I will take 7% growth anytime, anywhere around the world. And here in India, a couple of years ago, it was very tough times. As we look now, I think, the stage is set for some healthy growth in gross domestic product ... but also growth in the industry. But we take a long view. And if you always take the short term view, I think it will hurt your brand, the customer, it will hurt your long-term prospects.
 
Would you look at acquiring or joining hands in markets like India?
 
We are going to merge. The biggest opportunity will be continue to merge Ford. We were a global company in name only. We ran the business as individual regions, we have been on this journey of merging ourselves to `One Ford` for the past seven or eight years and we are just getting started.
 
I got asked a lot of questions around, when I was first named CEO, what are you going to change, what is going to be your new strategy. My simple answer was, what was going to change was the pace, because I had the opportunity to help develop that strategy over the last number of years and implement it. And, the last an organisation needs right now is a left turn on strategy and confusing them. We have a lot of momentum. It has allowed us to put the business back on a strong foundation. Now we have the opportunity on the pace of progress on the learnings around the `One Ford` plan. As we go forward, we will continue to focus on making great cars and trucks, but also invest in new technologies.
 
I think we are at an inflection point as an industry with technology as enablers, and what that means for mobility, car sharing, ride sharing, what does it mean for autonomous vehicles, what does it mean for connected cars, what does that mean for retail experience going ahead. We are looking at that as a huge opportunity and we are embracing them.
 
Apple and Google are looking at cars that are automated and driverless and they have put many incumbents out of business in the businesses they operate today. How are you preparing for it?
 
We are looking at this as a huge opportunity, because the way we run the company, every week we are looking at the business environment, we are looking at the customers, we are looking at markets, competitors, it is a great way to keep us very focused and pro-active in looking at trends.
 
So, in terms of the trends that I mentioned and the technology enablers, we were the first to introduce `Sync` (an integrated in-vehicle communications and entertainment system) back in 2007. We now have 10 million vehicles on the road with connected vehicles. But another part is recognising those trends. We have decisions and pre-decisions going around. What do we want in our core competencies and grow that capability within, from where do we want to purchase some service and the third thing is who do I want to partner with going ahead. The good news is that we are embracing this, we are looking at it as a huge opportunity. We talk with everybody. At the end of the day, whatever we decide to do, we are the ultimate system integrator.
 
We can have a lot of new competitors, we never knew them before, but you still must design, develop, manufacture and go to market with physical product that is safe, that is fuel efficient and that offer consumers the right value. So those are things that drives us.
 
Would you be open to collaborating with Google or Apple?
 
Well, we work with everybody right now. We are working with Apple on car play, how will that interface with the vehicle. But again, we are the ultimate system integrator, we want to make sure that the car is safe, as I mentioned, you are not distracted.
 
We work with Google on advertising, on the android auto. Again, it is about talking with everybody, but making sure that the experience in the Ford vehicle has a Ford taste to it.
 
Let us take you back to your Indian operations. Three years from now - 2018, where would you want to see Ford in India?
 
I think we have the best management team. I think we have put Nigel (Harris, the MD) here, he is very talented, it is very clear, that part that we want India to play. It is very clear that every part of the Ford is contributing positively, tangible, intangible or financial. So we are on a journey here. I think again the great news is the way we run the company, Nigel has at his disposal, all our skill teams and with Dave`s (Skoch) support coming out Asia Pacific, we have a very big focus here on India. We are cognizant of the fact that you mentioned, that we are a one hit wonder for a period of time, we are very dedicated to make sure we build this brand over a period of time, we build the portfolio and we build a profitable business.
 
How soon?
 
As they say in Spanish, Lo antes posible... As soon as possible. When you are trying to build a business in the country, there`s always a significant amount of investment you have to put upfront. Investment in people, in products, in facilities, and profitability follows. And that`s the path in India, too. We are making those investments, and we want them to bear fruit. And we`ll play that over time and not over a 20-year time frame. It has to be something that`s acceptable to the business. I think we are on the right path.
 
Do you think cars made here can find its way to the US?
 
I think we can always improve quality throughout the Ford world. And, I`ll never rule that out... In business, you never rule out from the beginning certain opportunities. But it all comes down to making sure first and foremost that wherever the product is manufactured, you want to make sure that it is high quality and meets the expectations of consumers. That`s the way we are approaching this.
 
Do you think you can move manufacturing small cars from Europe to India?
 
There are opportunities to complement our manufacturing operations in Europe. For example, EcoSport is not produced in Europe. And again, that`s the beauty of the way our One Ford plan is reviving the company.
 
We are optimising our footprint around the world and not necessarily around the region, and that`s why India is going to play a more important role.
 
Can you define timeframe to utilise these assets in India?
 
Over time we have objectives but we are not at liberty to talk about...
 
Governments around the world are increasingly getting tougher and in their regulatory zeal are pushing people to use public transport. Paris recently clamped a law that allowed cars with only even number registrations to enter the city on certain days. Do you see this as a threat?
 
What we are seeing around the world is that governments are encouraging like decreased CO2 emissions, increased fuel economy norms, etc. The key is to make sure we are in a dialogue with the governments because we want to be a part of the solution and we don`t want to be saying no all the time, particularly because these things are also important to our consumers. We want to be in a dialogue with governments because when they set regulations, that, they are realistic.
 
Are you surprised by the dominant position that Maruti Suzuki holds here and global behemoths like Ford, Toyota, Volkswagen and GM having a miniscule share. Where did Ford go wrong in India?
 
We have a lot of experience in buying brands and partnering but again working amongst ourselves and emerging Ford is our biggest opportunity.
 
Maruti Suzuki is a very very capable competitor. They have a dominant market position in India, very tenacious, they are very creative. We do a lot of benchmarking. We benchmarked Maruti Suzuki and we are learning a lot, because we feel we can learn something from everybody and we are taking those learnings and using that to improve our business here.
 
You think they can manage to keep their share for long?
 
I think most markets over time you see equalisation. You see Europe, even to a lesser extent in the US what`s happening ... You see China over time and everybody with such market shares have been target at some point of time.
 
What keeps you awake?
 
Laughs. Absolutely nothing. Because my days are so full that when I get home, I`m really tired.
Source : The Economic Times
 
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