By Samar Srivastava| Nov 9, 2012
Ford India's outgoing president and MD Michael Boneham tells Forbes India how the company expanded its capacity and increased sales
Last Position: President and Managing Director, Ford India
Education: Bachelor of Education from Charles Sturt University, New South Wales, Australia
Career: Started as an education and training officer at a Ford plant in Sydney; went on to serve in a variety of roles in Asia, Europe and USA
Hobbies: Playing golf and tennis
Q: Since you took over at Ford India, annual sales have trebled. That must have required a lot of investment and training. How has the organisation changed?
When I first arrived, we were an interesting niche player. We had a couple of vehicles that were selling reasonably well. We were doing 28,000 units a year. Now we’re doing three times that and are also a big exporter. We’ll sell 1.2 lakh units this year if you count in exports. Sales have gone up four times.
First up, we increased our manufacturing group significantly. We invested $500 million to increase the capacity from 100,000 to 200,000 units a year and also beefed up the engine plant to 240,000 units. We needed to have dealer and service outlets in place in order to launch Figo effectively. We more than doubled the number of dealers from 100 to 241.
With Figo, we were able to deliver a huge volume increase. That gave the company confidence to invest another billion dollars in India. This new investment is in Gujarat and it takes our capacity up from 200,000 to 440,000 units, and another engine plant that increases the capacity to 610,000 engines. We also plan to come up with eight new products in the next five years. The first is the new Fiesta and the second is the Ecosport.
Q: After the success of Figo, shouldn’t the company have moved faster with new car launches?
First, we needed to see how Figo fared. We had to incorporate India into the global planning process. Most of our new launches will be in the small car space and the movements from proposal to initial design and manufacturing take time. We need to get board approvals for all of this. The next thing is we’ve got it right from the timing perspective. We are in a bit of a lull in the industry; we think we’ll get out of it in 2013. That’s when our new launches take place and we ought to be well-positioned. We have a variety of category B car platforms as we go forward. They are designed as global products that fit into the requirements of developing markets like India and the Asean.
Q: The Indian auto industry has had its fair share of labour troubles of late. How concerned are you about labour issues?
We can only focus on our own relationship with our employees. We’ve had an outstanding relationship with them; it means direct communication with shop floor employees. Ford is about flat organisational structures and anyone can talk to the MD at any time. When you watch these things [labour issues], you are concerned about it; they can only be addressed by maintaining positive relationships with your people.