Ford has a total annual production capacity of four lakh units in India but only 20 percent of the plant’s capacity is being utilised currently
There have been rumours in recent months about Ford exiting its India operations soon. Before today, these developments were mere speculations as Ford continued to deny the reports about their plant shut down. But now, Ford India has officially announced their plant shut down.
Following accumulated operating losses of more than $2 billion over the past 10 years and a $0.8 billion non-operating write-down of assets in 2019 – Ford has officially announced their exit from the domestic car market in India. Sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold.
The fact cannot be denied that the American carmaker has been facing a really hard time in India for the past few years. Despite being actively carrying out operations in the country since the last quarter of a century, the company has failed to garner enough sales to extract a sizeable profit.
Manufacturing Ceased With Immediate Effect
Ford exit from India comes in a similar fashion as that of General Motors. Just like GM, Ford had plans to launch new cars – before announcing their sudden exit from domestic car market. GM continued to export cars from India post their exit, but that also came to an end earlier this year.
Ford has shut down manufacturing vehicles for domestic market with immediate effect. This is what the official release stated – “Ford India will cease manufacturing vehicles for sale in India immediately; manufacturing of vehicles for export will wind down at Sanand vehicle assembly plant by Q4 2021, and Chennai engine and vehicle assembly plants by Q2 2022; Ford will work closely with employees, unions, dealers and suppliers to care for those directly impacted.”
How Will Ford Exist In India
Unlike GM, who was present in India for manufacturing engine and cars for export market – Ford will only exist in India for manufacturing engines for export market. In addition to this, Ford will provide full customer support operations with service, aftermarket parts and warranty support.
Ford will be present in India via select outlets who will sell exclusive cars like Mustang coupe, Mustang Mach-E electric, etc. These will be sold as CBUs in India. India will remain home to Ford’s second-largest salaried workforce globally
Jim Farley, Ford Motor Company’s president and CEO, “I want to be clear that Ford will continue taking care of our valued customers in India, working closely with Ford India’s dealers, all of whom have supported the company for a long time. India remains strategically important for us and, thanks to our growing Ford Business Solutions team, will continue to be a large and important employee base for Ford globally.”
Anurag Mehrotra, president and managing director of Ford India, added: “Ford has a long and proud history in India. We are committed to taking care of our customers and working closely with employees, unions, dealers and suppliers to care for those affected by the restructuring.”