Ford may exit India: Looking to sell its Chennai & Gujarat factories to Ola

Ford Motor Company may follow General Motors’ path in India. According to TOI, the American automobile manufacturer is looking to wrap up its Indian manufacturing operations. The manufacturer will take a call on its two factories in India by the end of this year.

Ford India has two factories in India – one in Maraimalainagar and the other one in Sanand. Ford is reportedly talking with various manufacturers and other car companies for contract manufacturing and/or sale of its Indian factories. The latest round of talks is with Ola, which is a cab-aggregator but is looking to enter the electric vehicle business.

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While officials of Ola refused to comment on the development, Ford India’s spokesperson termed the news as speculative. According to the Ford India spokesperson, “We would not like to comment on speculations. We continue to assess our capital allocations in India and expect to have an answer in the second half of this year,”

Ford and Mahindra were expected to enter into a partnership. However, on the 1st January 2021, both the manufacturers amicably announced that the joint venture is off and both the manufacturers will head their own separate ways.

Since Ford and Mahindra were at an advanced level of talks, Ford went slow with their contract manufacturing discussions with the other manufacturers. If the joint venture had become successful, Ford’s Maraimalainagar and Sanand plants manufacturing to about 40,000 units per annum.

Ford talked with MG and Great Wall too

After the partnership with Mahindra and Mahindra did not go through, Ford also approached other manufacturers including MG Motors, Changan and Great Wall. While Changan and Great Wall did show some interest, the talks did not go through because of the Indo-China border issues, which created an anti-China sentiment in India.

Due to the COVID-19 pandemic and related lockdowns, most manufacturers have suffered massively in the country. The market shrunk, which has caused the factories to operate much below their total capacity.

Reshuffle of senior management

In April this year, Ford India did a reshuffling of its top management and even appointed Steven Armstrong as its transformation officer for the Indian market. Ford had appointed Steven Armstrong as a transformation officer for its Indian and South American operations. Particularly for the Indian market, Armstrong will an important role. Anurag Mehrotra, Managing Director, Ford India will report to Armstrong, who is a Ford corporate officer and is president of Ford America and International Markets Group. He will be accompanied by Dianne Craig, Ford’s newly appointed president of International Markets Group.

Ford in India

Ford has recently launched the new EcoSport SE in the Indian market. However, the manufacturer is still missing from some of the most important segments in India, especially the mid-size SUV, which is ruled by vehicles like Hyundai Creta and Kia Seltos. Ford’s best-selling vehicle EcoSport has been around for years in the Indian market but it has lost to new, highly competitive vehicles like the Maruti Suzuki Vitara Brezza, Hyundai Venue, Kia Sonet and a slew of other cars in the segment.

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