MUMBAI: Ford India will invest $72 million to boost capacity at its local engine plant, the company said Tuesday, as it seeks to capture a bigger share of the country's surging market for cars.
Ford plans to raise production capacity at its Chennai factory in southern Indian state of Tamil Nadu by 30 percent, to meet rising demand for diesel-powered vehicles, it said in a statement.
Production will rise to 330,000 engines by mid-2012, the company said, creating over 300 new jobs, at the plant where it currently produces petrol and diesel engine variants for Ford cars.
"This investment supports our plan to introduce eight new global Ford vehicles in India by 2015," Michael Boneham, president and managing director of Ford India said in the statement.
The extra funding takes Ford's India investments to above $1 billion, it said, since starting operations the country in 1995.
Ford's car sales in India continue to rise, led by its best-selling Ford Figo model.
The company has sold a total 42,395 vehicles in calendar year 2011, an 83 percent rise year-on-year, for the same period.
India's domestic car sales grew by 30 percent to 1.98 million units during the last fiscal year to March 2011, the most in more than a decade, as an increasingly affluent middle class snap up new models.
Sales are however showing some signs of moderation, growing by 13.18 percent to 162,825 units in April -- its slowest pace in nearly two years -- due to recent price hikes and costlier auto loans, as interest rates rise.
India remains an attractive destination for global manufacturers such as Ford, Renault-Nissan, General Motors and other companies, who rely on India and China to help offset saturated markets in the West.
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