In an exclusive interview with rediff.com's George Iype, Ford India Managing Director Philip G Spender elaborates why Ford chose Madras and discusses other issues relating to the auto industry in the country. Excerpts:

Why did Ford choose Madras as its investment destination?

Madras offered the best value package amongst the many seen and evaluated by Ford. Some of the key deciding issues were the vast pool of skilled technical persons in Madras, disciplined and productive labour environment, adequate basic infrastructure as seaport, international airport, telecom, power and road network. A lot of improvement is required on the road infrastructure throughout the country to grow the economy. But there is the availability of a well developed auto component industry in the southern region around Madras.

Last but not the least , the co-operation and support from all agencies in the Tamil Nadu government has been instrumental in making us what we are today.

Are you satisfied with the infrastructure facilities and the industrial climate of Tamil Nadu?

Yes, with the basic ingredients. However much more needs to be done to make Tamil Nadu on the global industrial map. We understand that the government is having infrastructure as its top priority. The government is also addressing administrative and labour reforms. We understand these issues will take some time, but we will get there.

Do you plan to convert your Madras plant as the hub of the Asian operations?

Our major aim is to see that the Ford Ikon volumes grow to the full potential and develop a robust launch pad for our future business strategy.

Have you ever felt at a disadvantage because your plant is situated in southern India unlike the country's biggest car-maker Maruti that is based in North India?

We are aware that 'North' happens to have the largest market potential. Our effective logistics planning takes care of timely movement of cars to customers. India is in early stages of market development of the automobile industry and we expect good growth in the other regions, too. You may like to know that Ford Ikon leads its segments in the South and West and is a close third in the North.

Madras has more than 35 per cent of the auto components industry in India. Have your distribution and service networks from been smooth?

We run a very effective and efficient operation derived from Ford's best in class global practices. We have taken considerable effort in ensuring that our distribution channels on incoming material supplies as well as service operates as desired. Our methods are being benchmarked by many of our competitors.

If the Indian government liberalises car import norms and allows free trade in used (second hand) cars, what will happen to the huge investments made in India by foreign automobile companies like you? Will you then stop launching new models regularly?

Ford India does not support indiscriminate import of junk technology, which will make India a dumping destination. This will destroy India's growing component industry and kill employment opportunities.

We have a long-term commitment to India and will continue to add value to our operations in line with market and economic growth.

According to you, what distinguishes the Indian car market from markets in the developed world?

Your question covers a very wide perspective. In general, the basic difference is that the Indian car market has grown in an insulated /regulated environment. The consumer has remained content with whatever was available -- even if he had to wait for several months to get his car delivered. In the developed market this is not so. The consumer has a

wide choice to buy products of global quality, contemporary design at competitive price. We are now on a similar path in India.

A lot is being said about reforms and liberalisation. Have you benefited from reforms in India? If yes, in what way? Is there scope for further liberalisation in the auto sector?

Ford believes in open market policies. The consumer must decide what he wants .In a liberalised environment the government should encourage to support a market and products that operate freely on consumers wants and needs.

The auto sector is regarded as the engine of a nation's economy. The example of Henry Ford putting the world on wheels is well known. The American industrial growth followed the developments of the automotive industry. The key thing is for the government to grow the auto sector, which in turn will grow jobs and provide impetus to GDP. One single agenda is the reduction in excise duty across the board on all automobiles to reduce cost of acquisition. Such a measure will grow volumes and ensure government revenue collections remain neutral if not more. You may be surprised to know that currently 66 per cent of the sticker price goes in taxes and duties, one of the highest in the world.

Can you relate the experience of doing business in India? Have you enforced new management practices or work culture or any other unusual features at your plant?

We are extremely happy with our operations in India. We are progressing as per our business imperatives. We understand the Indian auto industry with cautious optimism which will grow in the long-term, but on a bumpy road. All our plans are drawn up taking into account the external environment. We foresee the Indian auto industry having a very bright future in the medium and long term, given the right encouragement.

Are you happy with the skills of Indian workforce? Will you offer jobs for your Indian workers abroad like the infotech companies are doing?

Yes. The basic skills are as good or better than any in the world. We need to nurture and develop them to meet the competitive global environment. We at Ford India are doing just that. Educate and train our people -- our most valuable resource. We are a global company and there are opportunities for our employees to work in any of the Ford's world-wide locations.

How is Ford Ikon faring in the Indian market? What is the feedback from dealers and customers so far? Is it doing better in South than in North?

Ford Ikon is the established and innovative leader of the 'Ikon segment'. Customers' response has been overwhelming. The Ford Ikon offers the widest choice to consumers moving into the Josh zone through its wide offerings 1.3CLXi, 1.3 Exi, 1.6 Zxi, and 1.8 Zxi (diesel). Ford Ikon is leading the mid-segment in the South and West and amongst the leaders in the North.

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