Automaker Ford to scrap its production in India, shut down all plants
- Ford is exiting the Indian market because it is not profitable
- Ford has invested over $2 billion in India
- The automaker will continue to sell some of its cars in India through imports
Auto giant Ford Motors is planning to scrap its production in India and will shut down both its plant in the country, the company announced recently. With the move, Ford becomes the latest automaker to exit the Indian market.
Jim Farley, Ford Motor'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. 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."
According to the statement, Ford took the decision because the Indian auto market was not profitable for them to continue, said one of the sources, adding that the process will take about a year to complete.
Ford has invested over $2 billion in India at Chennai and Sanand manufacturing plants. The 350-acre Chennai plant has a vehicle-making capacity of 200,000 units and 340,000 engines a year while the Sanand plant spread over 460 acres, which is the younger of the two, has a vehicle-making capacity of 240,000 units and 270,000 engines a year.
However, the US automaker will continue to sell some of its cars in the country through imports, said the second source, adding that it will also provide support to dealers to service existing customers.
Ford is not the first auto-giant to opt out of the Indian market. Before this, companies such as General Motors and Harley Davidson decided to cease production in India.
As per the company, approximately 4,000 employees are expected to be affected by the pull-out. Ford will work closely with employees, unions, suppliers, dealers, government, and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to mitigate the effects of the decision, the company added.
Ford was among the first multi-national automotive companies to enter our market back in 1994.