Confirming rumors that have been making the rounds for some time now, Ford has announced it is ending production in India with immediate effect, shutting down both of its vehicle manufacturing facilities as it undertakes a restructuring of operations in the Indian market. In its statement, Ford has said it would end manufacturing for the domestic market immediately; it will wind down vehicle assembly for export markets at its Sanand plant by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022. Sales of the Ford Figo, Aspire, Freestyle, EcoSport, and Endeavour will end once dealer inventories have been cleared, which means there will be no more affordable Ford models on sale in the country.
In its announcement, Ford said this decision resulted from the carmaker accumulating operating losses of more than $2 billion over the past decade and a $0.8 billion non-operating write-down of assets in 2019. With this move, Ford expects to create a sustainably profitable business in India. Ford maintains it had to take this decision after investigating several options, including partnerships, platform sharing, contract manufacturing with other OEMs, and the possibility of selling its manufacturing plants, which is still under consideration.
Ford India will continue manufacturing engines for export markets. The company says it will continue to provide full support to its customers with dedicated service, aftermarket parts, and warranty support. The company will maintain parts depots in Delhi, Chennai, Mumbai, Sanand, and Kolkata and will help dealer network transition from sales outlets to parts and service support points.
However, Ford isn’t making a complete exit from the Indian market. The company has confirmed it will begin importing signature models, including the Ford Mustang coupe and its all-new hybrid and fully electric vehicles, including the Ford Mustang Mach-E crossover.
Commenting on this decision, Jim Farley, Ford Motor Company’s president, and CEO said, “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,” said “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. I want to be clear that Ford will continue taking care of our valued customers in India, working closely with Ford India’s dealers, all of whom have supported the company for a long time. India remains strategically important for us and, thanks to our growing Ford Business Solutions team, will continue to be a large and important team member base for Ford globally.”
Anurag Mehrotra, president and managing director of Ford India, added, “Ford has a long and proud history in India. We are committed to caring for our customers and working closely with employees, unions, dealers, and suppliers to care for those affected by the restructuring. Despite these efforts, we have not been able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing. The decision was reinforced by years of accumulated losses, persistent industry overcapacity, and lack of expected growth in India’s car market.”