US auto giant Ford is to set up a second production plant in India as part of its expansion in one of the world's fastest-growing car markets, reports said on Wednesday.
The report came the day after Ford said it was looking to step up global production by 50 percent by 2015 to eight million and expected Asian markets, particularly India and China, to make up one third of total sales.
The financial daily Mint said the Ford India manufacturing facility will either be in Gujarat state or neighbouring Maharashtra, both in western India, and a decision will be taken at a board meeting later this week.
The newspaper sourced five people familiar with the matter. Ford India declined to comment but a spokesman was quoted as saying that it was "exploring other options" in addition to expanding its existing Tamil Nadu plant.
Ford India's marketing director, Nigel E. Wark, added: "We have already invested $600 million in India and going forward the investments will be significant."
One unnamed source said that the firm had been in talks with a number of states but had narrowed down the choice to Gujarat and Maharashtra, both of which are already home to a number of leading auto-makers.
Possible locations include Sanand in Gujarat, where Tata Motors produces the low-cost Nano, and around Chakan, near Pune in Maharashtra, where Volkswagen, Fiat India, General Motors, Mahindra and Land Rover all have facilities.
An unnamed Gujarat state government official was quoted as saying that Ford India officials had met them at least three times in the last two months and they had offered them 500 acres (202 hectares) of land at Sanand.
India's top vehicle maker Maruti Suzuki last week said it was looking to set up a new production facility at Sanand.
The new Ford India facility would cost at least 50 billion rupees ($1.1 billion) and have an initial capacity to produce 300,000 cars a year, in order to meet demand in both the domestic and export markets, Mint reported.
The company said in May that it would invest $72 million to boost capacity at its engine plant in Tamil Nadu as part of plans to introduce eight new models in India by 2015.
The Chennai plant can assemble up to 200,000 cars a year.
Ford car sales in India are buoyant, despite a slow-down for most of its main competitors. Sales rose 19 percent from April to May, from 7,319 to 9,046, led by strong sales of its Figo model.