Ford India exits due to non-profitability

By Arushi Rawat | on September 9, 2021

Ford has confirmed its decision to cease manufacturing operations in India, bringing 27 years of its glory to a halt. The carmaker will wind down its vehicle assembly operations in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing operations in Chennai by the second quarter of 2022.

Years of accumulated operating losses mounting up to $2 billion over the past 10 years, coupled with a lack of expected growth in India’s car market, has pushed Ford to cease its manufacturing operations in India. The carmaker, however, will temporarily continue its engineering and engine manufacturing operations at its Sanand plant for the export market. Ford’s restructuring is expected to affect at least 4,000 employees.

The going had been tough for Ford for the past couple of years, as the carmaker had invested close to ₹7,000 crores in its Sanand plant when everyone expected the market to grow to nine million units by 2025. Sadly, due to the ongoing pandemic, the Indian market is running at half the expected volume, adding to Ford's woes.

As a brand, Ford will continue to exist in the domestic market via some of its niche products like the Mustang through the import route, of course, and will also focus on bringing in new hybrid and fully-electric vehicles like the Mustang Mach-E here. As for its current fleet, sales of car models, like the Figo, Aspire, Freestyle, EcoSport, and even Endeavour will cease once dealer inventories are sold.

Putting existing customer queries and concerns at bay, Ford in its official statement has confirmed that the restructuring and ceasing of operations will not affect the brand's after-sales services in India. It will continue to provide customers with the necessary support in terms of spare parts, periodic service, and warranty.

In Ford’s defence, the American carmaker fought tooth and nail to make it work. The proposed joint venture with Mahindra & Mahindra, which eventually did not go through, was perhaps the final blow to the Blue Oval's future in India. Once that deal collapsed, Ford was left with no new cars for the future, underutilised plants, and mounting operational losses.

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Tags: Ford Ford Endeavour

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