Ford India to stop local manufacturing

Ford Motor Company’s Indian unit conducted a town hall for its employees to announce its decision to cease manufacturing activities in India due to a nearly $2 billion cumulative loss and declining volumes.

Ford will no longer be a mass-market brand in the nation, which will affect roughly 4,000 jobs. Top management informed staff that the production of mass-market models produced in India, such as the Ford Figo and Ford EcoSport, would be “ramped down”. Even the Endeavour’s future looks bleak.

The firm plans to keep its engine manufacturing facility in Sanand, Gujarat, and would continue to service its products in the country.

The decision to shut down was made because Ford India is estimated to have lost over $1 billion in losses and write-offs in the previous couple of years alone, and continuing operations on its own was deemed unviable.

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With the formal announcement in October 2019, the American manufacturer formed a joint venture (JV) with Mahindra. However, on December 31, 2020, that agreement fell through.

Since the JV had been in the works for over three years, Ford had already built many of its future plans around it. This error in judgment ensured that Ford had no new models in the foreseeable future without the JV, and the plants would have continued to be underutilised.

After this, Ford tried hard to find a new strategic partner for its manufacturing facilities, but nothing worked, which ultimately lead to this development that you are reading about.

While production will continue for the next seven quarters, the American company is looking for purchasers for both of its plants.

The Sanand facility, which is now operating at less than 10 percent capacity, will most likely be shut down first. The Chennai facility, on the other hand, may be able to continue producing vehicles until 2022 in order to meet pending domestic/worldwide orders.

Ford India’s future

Ford will continue to sell its CBU cars in India such as the Mustang. The after-sales service will continue as well. Also, the Ranger pick-up truck, and the all-electric Mustang Mach-E, could be imported to India and added to the company’s lineup in the future.