The day of 9th September 2021 turned out to be an unpleasant one for the auto industry of India, as Ford decided to cease local manufacturing facilities in the Indian market. This move comes as a part of Ford’s restructuring of business plans for the Indian car market. The announcement was made officially by Anurag Mehrotra, President and Managing Director, Ford India.
The main reason cited behind this move is the increasingly challenging condition in the Indian car market, which has led to a continued slowdown. Another major reason is Ford’s cumulative losses of USD 2 billion against the total incurred investment of USD 2.5 billion in all these years of its existence. Due to unfavourable returns of future investments by shareholders and parent companies in the USA, Ford has decided to cease its local manufacturing hubs in India.
As per the new move, Ford will be shutting down its manufacturing facilities in Chennai (Tamil Nadu) and Sanand (Gujarat) in a phased manner. The engine and manufacturing plants in Chennai will be operational till the second quarter of 2022 and the vehicle assembly plant in Sanand will be active till the fourth quarter of 2021.
However, these plants will be operational only for manufacturing products for exports, and not for local markets. This means that the production of mass-market models like Figo, Aspire, Freestyle, Ecosport and Endeavour have stopped with immediate effect. These models will be sold only till the current inventories present at the dealerships last. The engine manufacturing plant in Sanand, however, will continue to operate for exports to global markets.
Ford will continue to sell in India
While Ford has decided to stop local manufacturing of its products, the restructuring move states that it will continue to exist in the Indian market, but as a niche car maker. As per this asset-light business decision, Ford will be selling import-only global models like Mustang and Mustang Mach-E, which will be sold in limited numbers through limited outlets.
For over a million current owners of Ford vehicles in India, the carmaker has decided to continue offering support in the form of providing service, spare parts and warranty supports. Ford is working closely with all of its current dealers and channel partners for promising quality service and delivering competitive cost of ownership.
Ford arrived in the Indian car market in 1996 and was operating in the mass market segments for the last two and a half decades. In this whole duration, the American carmaker had set up engine and vehicle manufacturing plants in Chennai, Tamil Nadu and Sanand, Gujarat.