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Diesel tax will create uncertainty on investments: Ford India
Posted on 08 Jun 20126,580 Views1 Comments
American car maker says it will have to assess current investment plans in Gujarat and Chennai
Ford India on Friday said the government's proposal to impose additional tax on diesel vehicles will create an uncertainty on future investments in the country.
The company that had last year announced an investment of $1 billion (Rs 5,563 crore) on a new manufacturing facility at Sanand in Gujarat and another $72 million (Rs 400 crore) for diesel engine production in Chennai said it would have to "assess" these investments while still going ahead with it.
"Given the current market situation, any additional tax on diesel vehicles will have a negative impact...Action like this creates uncertainty on future investments," Ford India President and Managing Director Michael Boneham told PTI.
When asked if any additional duty on diesel vehicles would impact the current investments, he said: "No, but we will assess our current investments...These investments were made after certain assumptions based on market conditions. If things change we have to look at what kind of capacity we are installing."
The new facility at Sanand was envisaged to initially produce 2.40 lakh vehicles and 2.7 lakh engines per year creating 5,000 jobs. With the $72 million at Chennai plant, Ford India was planning an additional output of 80,000 engines by this year to take the total to 3.30 lakh units per annum.
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