Hit by $2-billion loss, Ford halts production in India

Will sell only imported vehicles, 4,000 jobs to be impacted

Hit by $2-billion loss, Ford halts production in India

Ford Motor Co will stop manufacturing in India and take a hit of about $2 billion as it does not see a path to profitability in the country, becoming the latest automaker to leave a major growth market dominated by Asian rivals.

New Delhi, September 9

Ford Motor Co will stop manufacturing in India and take a hit of about $2 billion as it does not see a path to profitability in the country, becoming the latest automaker to leave a major growth market dominated by Asian rivals.

The decision by Ford comes after it struggled for years to win over Indian consumers and turn a profit. The carmaker entered India 25 years ago but has a less than 2% share of the passenger vehicles market.

In its statement, Ford said it accumulated operating losses of more than $2 billion in 10 years in India and demand for its new vehicles had been weak. “Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability,” Ford India head Anurag Mehrotra said.

“The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market,” he said.

Ford follows other US carmakers such as General Motors and Harley Davidson which have already left India, a market that had once promised exponential growth. The country is dominated by mainly low-cost cars made by Suzuki Motor Corp and Hyundai Motor.

As part of the plan, Ford India will shut down operations at its plant in Sanand (Gujarat) by the fourth quarter of 2021 and vehicle and engine manufacturing at its Chennai plant by 2022.

The US automaker will continue to sell some of its cars in India through imports and it will also provide support to dealers to service existing customers, it said. Around 4,000 employees are expected to be affected by its decision.

The company said the decision to cease production was made after considering several other options, including partnerships, platform sharing, contract manufacturing and the possibility of selling its manufacturing plants, which is still under review. — Reuters

To shut down both plants

  • The carmaker entered India 25 years ago but has a less than 2% share of the passenger vehicles market
  • The American auto major said it accumulated operating losses of more than $2 billion in 10 years in India and demand for its new vehicles had been weak
  • As part of the plan, Ford will shut down operations at its Sanand (Gujarat) plant by the fourth quarter of 2021 and vehicle and engine manufacturing at its Chennai plant by 2022

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