Wednesday, December 1

Ford will stop producing cars in India. Brand not exiting the market completely

Ford announced today that manufacturing of vehicles for local sale will cease immediately while export manufacturing will wind down at the Sanand plant by Q4 2021, and the Chennai engine and vehicle plants by Q2 2022.

Ford recently launched the Figo AT in the Indian market. The facelift of the Ecosport was all set to launch in the festive season. Recently, a Bi-turbo version of the Endeavour was also spotted with an emission testing kit.

Ford was among the first multi-national automotive companies to enter our market back in 1994. Now, 27 years on, the American carmaker is stopping the production of its cars and SUVs in India.

However, the brand will continue to operate selling imported CBU models and has also announced that it will “significantly expand its 11,000-employee Business Solutions team in India in coming years to support Ford globally.”

Jim Farley, Ford Motor Company’s president and CEO said via the release “Despite investing significantly in India, Ford has accumulated more than $2 billion of operating losses over the past 10 years and demand for new vehicles has been much weaker than forecast.”

Such low output figures paired with the fact that the Sanand plant was originally built to meet Ford’s global standards, means that it has been too expensive to make cars for our market profitably at said plant.

In comparison, the Maraimalai Nagar facility did allow for more cost-effective manufacturing. However, even sustaining this single plant where the EcoSport and Endeavour– two of the brand’s most popular models – are made, isn’t financially viable.

 

Ford will continue to have a presence in India and will increase its business solutions team that will support Ford globally, the team will focus on engineering, technology, and business operations. The company also said via its release that India will remain Ford’s second-largest salaried workforce globally and in addition to Ford Business Solutions, Ford India will continue engine manufacturing – until Q2 2022 – for export.

That said however, Ford says that about 4000 employees are expected to be affected by the developments and the company will work with the employees, unions and all stake holders to plan a fair settlement.

The move to shut local production will certainly hit existing owners however Ford has committed to continue full support operations with service, aftermarket parts and warranty services. Dealers too will be operational as the network would still exist to support the CBU business. However customer touch points may reduce especially in smaller towns.

Ford will mainly focus on importing niche models, like it does in Australia and Brazil. This means Ford could bring in models such as the Mustang, which it announced and also other vehicles like the Bronco, and other EVs and even the Ranger pickup truck for which the carmaker already had an India launch plan.

 

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