Previous model Fiesta sedans on the final line at Chennai. Ford India began building the current generation in June
As Toyota on Wednesday officially confirmed a 100,000 unit capacity boost on top of an earlier announced increase at its Indian unit TKM, media reports citing unnamed officials said Ford planned to open a second manufacturing plant in India.
The automaker expects to spend over US$900m on the factory in the western state of Gujarat, news agency AFP said, citing local reports.
The INR40bn ($909 million) plant was expected to open in 2014 and employ around 5,000 workers, a reported quoting an unnamed official directly involved in the project told Dow Jones. Ford was due to sign an agreement on the plant with the Gujarat government on Thursday.
Ford has a plant near the southern Tamil Nadu state port capital Chennai where it manufactures small cars such including the Figo and Fiesta plus the Endeavour SUV.
The Press Trust of India, quoting what it said were official sources, reported Gujarat was allocating 400 acres (162 hectares) of land in Sanand, 40kms (25 miles) from the state's main city of Ahmedabad, for the plant.
The automaker would not comment on the reports but a statement said that as "part of our plan to introduce eight new products by the middle of the decade, Ford is expanding its capacities at its existing facility in Tamil Nadu as well as exploring other options".
Ford updated and lightly restyled its previous generation European Fiesta to create the Figo for India and other emerging markets to which it is now widely exported. Indian made engines are also shipped to other Ford plants.
The company aims to introduce more products from its global range and other Asia Pacific and African markets to the growing market in India.
Ford has said it wants to hike global production 50% by 2015 to 8m units and expects Asian markets, particularly India and China, to make up a third of total sales.
Its Chennai plant currently can assemble up to 200,000 cars a year.