Chennai, July 17: Ford has raised the capacity at its Chennai engine plant to 3,40,000 units per annum.
The flexible powertrain facility allows Ford to manufacture both diesel and petrol engines in a mix determined by market conditions, giving the company an edge over its competitors in meeting the rising demand for diesel engines.
Ford is also raising the capacity of its engine plant at Sanand in Gujarat, taking its aggregate capacity in India to 6,10,000 units.
Ford India president and managing director Michael Boneham said, "I am fairly confident that the price difference between diesel and petrol will remain even if the government decides to hike diesel prices. The 80:20 demand ratio between diesel and petrol vehicles might vary a bit here and there but not much. With our flexi plant in place we are in a position to manufacture according to customer needs."
The engine plant, which manufactures nearly 17 variants of engines, will also cater to export markets. Nearly 40 per cent of the engines will be exported to the Asean and the Asia-Pacific region.
Boneham is optimistic that no additional tax will be imposed on diesel vehicles ' a proposal that the government is weighing to bring a parity between the demand for the two fuels.
"It is not as if they aren't taxing diesel vehicles. There is already an additional tax of 12 per cent on small diesel vehicles, 24 per cent on bigger vehicles and 27 per cent on engines bigger than 1.2 litres. How much more can they tax?" he said.