The automotive media has been buzzing with the rumours of Ford ending its operations in India. Most of us wanted these rumours to be false, recent reports seem to tell a different story. Reportedly, Ford India has shut production in their Sanand and Maraimalai plants. Almost, 4000 Ford workers are said to be affected by this move.
Jim Farley, Ford Motor Company’s president and CEO said, “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.”
Why is this happening?
Both Ford India plants have a cumulative production capacity of 400,000 units a year. However, given the current demand, Ford is making only 80,000 units a year, 50% of which are exports. This has caused Ford, India an accumulated loss of $2 billion dollars forcing them to pull the plug on its India operations. The only way Ford could have survived in India was through a joint venture with another OEM. They did try to join hands with Mahindra and Mahindra in 2019, but the deal fell flat when Mahindra decided to pull out in December 2020. Ford has not been able to find another partner since to no success.
Future of Ford and India
The US carmaker will continue to provide support to their existing customers. So, existing Ford owners need not worry as they will continue to get service support and spare parts. Ford will continue to bring its international models, like the Mustang as a CBU. Ford will also consider bringing in some of its electric models via the CBU route.