Case study Ford Asia

1. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
Ford Asia: Facility Decision in
Gujarat

2. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
Ford history
1. Headquarter: Michigan
2. Manufacturers of cars , SUVs and Trucks.
3. Began operation in 1903.
4. Model T car.
5. International office in Paris.
6. 61% in USA , 33%in Europe, 5% in rest
world.

3. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
8. Early losses in 2001 due to Korean and
japan brands.
9. Entry of Allan Mulley from Boeing to Ford
for turnaround.
10.Aston Martin, and Jaguar sold to Tatas.
11. Sold Volvo to Geely.
12. Reduced stake in Mazda.

4. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
14. Focus on fiesta, Fusion, Mondeo and
cross overs.
15. Focus shifted to small and fuel efficient
vehicles.
16. Thought of Manufacturing outside USA
17. Reduced Plant from 20 to 8.
18.No of models reduced to 24 from 97.

5. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
19.Number of suppliers are reduced to 750
from 3300.
20. As models decreased components can
be manufactured in Non USA location.
21. Sale of domestic assets.
22. Negotiation with labour to reduce
wages.
23. Ford become profitable in 2009 and
reduced the no of workers to 1.9 lakh.

6. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
Ford Asia
1. Growth comes from china and India.
2. Manufacturing in china and Thailand.
3. Engine plant in china in 2009.
4. Ford figo from chennai plant in 2011.
5. Plans for sanand plant began.

7. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
Service parts business.
1. 70% of auto company comes from
services in sales.
2. Outsourcing of auto components.
3. E- coating process.

8. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
Service parts manufacturing
1. Import from australia.
2. Separate paint shop in Chennai.
3. Asian countries are different compare to
US and Europe.
4. Problems of coating in Thailand.
5. SVAP problems in Gujarat due to
different automobile standards in the
world.

9. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
Car industry in India.
1. Strong domestic growth.
2. Manesar, Pune and chennai.
3. 5% growth.
4. Gujaraat as new destination.
5. New private ports.
6. Issues of strikes in Gujarat.
7. 600 acres land allotted in Sanand.

10. MBA@GIT http://www.mba.git.edu.
© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu.
Options
1. Outsource e- coating in sanand to third
party.
2. TARR do not work for outsourcing.
3. Outsource in Chennai and transport part
to Sanand.( 1800 km, 13 days, fleet,
inventory, poor infrastructure, $3.5
billion)
4. Build a stand alone facility( service,
export,