The rumors of Ford wrapping up its India operations were floating around for quite a while now and Ford kept denying them by saying that it is committed to the market. That is of course until it could no longer bear the losses, as today the company made it official that it has incurred operating losses of more than $2 billion over the past 10 years.
Ford made it clear that it is shutting down Sanand (Gujarat) vehicle assembly plant by the fourth quarter of 2021 and vehicle and engine plant in Chennai by the second quarter of 2022. It’ll, however, retain the Sanand engine plant that produces engines for the Ranger pickup truck for export markets. Ford said that it’ll also retain the Ford Business Solutions—an R&D facility in Chennai that currently employs ~11,000 people.
Sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold, the company added. Of course, Ford assured that it’ll continue to support the existing customers with service and parts.
Interestingly, as per the latest FADA data, Ford currently holds a 1.42% market share in India, which is slightly more than the newcomer MG Motor. But it appears that Ford India lost to the newcomers’ aggressive product and marketing strategy. Unlike Kia and MG which cashed-in on selling the blingy products, Ford offered fun-to-drive cars such as the Ikon, EcoSport and Figo S. In fact, it was the EcoSport that started the sub-4 m SUV revolution in the country. But hey, as the cliché goes, all good things must come to an end.
As part of our Ford+ plan, we are taking difficult but necessary actions to deliver a sustainably profitable business longer-term and allocate our capital to grow and create value in the right areas. 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. – Jim Farley, President & CEO, Ford Motor Company
“Ford has a long and proud history in India. We are committed to taking care of our customers and working closely with employees, unions, dealers and suppliers to care for those affected by the restructuring,” added Anurag Mehrotra, President & MD, Ford India
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