Ford has a total annual production capacity of four lakh units in India but currently only 20 per cent of the plant’s capacity is being utilised.
In recent months, there have been rumors of Ford going out of operations in India soon. Earlier today, these developments were mere speculation as Ford continued to deny reports of its plant closure. But now, Ford India has officially announced the closure of its plant.
After accumulated operating losses of over $2 billion over the past 10 years and a non-operating write-down of $0.8 billion of assets in 2019 – Ford has officially announced its exit from the domestic car market in India. The sale of existing products such as Figo, Aspire, Freestyle, EcoSport and Endeavor will cease after the existing dealer inventory is sold.
There is no denying the fact that the American carmaker has been facing really tough times in India for the past few years. Despite operating actively in the country since the last quarter of a century, the company has failed to garner enough sales to make a huge profit.
construction stopped with immediate effect
Ford’s exit from India is similar to that of General Motors. Like GM, Ford had planned to launch new cars before announcing its abrupt exit from the domestic car market. GM continued to export cars even after exiting India, but that too ended earlier this year.
Ford has ceased manufacturing vehicles for the domestic market with immediate effect. The official release said – “Ford India will immediately cease manufacturing of vehicles for sale in India; manufacturing of vehicles for export at the Sanand Vehicle Assembly Plant by Q4 2021 and at Chennai Engine and Vehicle Assembly Plant by Q2 2022 Ford will work closely with employees, unions, dealers and suppliers to care for those directly affected.
How will Ford be present in India?
Unlike GM, which was present in India to manufacture engines and cars for the export market – Ford would only be present in India to manufacture engines for the export market. In addition, Ford Service will provide full customer support operations with aftermarket parts and warranty support.
Ford will be present in India through select outlets that will sell exclusive cars like Mustang Coupe, Mustang Mach-E Electric, etc. These will be sold as CBUs in India. India will continue to be home to Ford’s second largest salaried workforce globally
Jim Farley, President and CEO of Ford Motor Company, said, “I want to be clear that Ford will continue to care for our valued customers in India, working closely with Ford India dealers, all of whom have long served the company. India remains strategically important to us and will continue to be a large and important employee base for Ford globally, thanks to our growing Ford Business Solutions team.
Anurag Mehrotra, Chairman and Managing Director, Ford India said: “Ford has a long and proud history in India. We are committed to working closely with employees, unions, dealers and suppliers to take care of our customers and those affected by the restructuring.”