Published on September 9th, 2021 | by Daniel Sherman Fernandez0
Ford To End Vehicle Manufacturing In India
No more Ford Endeavor and Ecosport for India.
Reuters has just reported that the Ford Motor Co will stop manufacturing in India and close down it factories in Chennai and Sanand. This move will leave more than 4,000 workers out of a job.
Ford says that it has incurred losses of USD2 billion and does not see a path to profitability in the India as Asian car manufacturers seeing a rising growth in sales and consumer acceptance.
Ford is not the first car manufacturer to leave this major growth market dominated by Asian rivals. American automotive giant General Motors made an exit from India in May 2017 which caused some 15,000 job losses.
The decision by Ford comes after it struggled for years to win over Indian consumers and turn a profit. The auto manufacturer entered India 25 years ago but has a less than 2 percent share of the passenger vehicles market.
In its statement, Ford said it accumulated operating losses of more than USD2 billion in 10 years in India and demand for its new vehicles had been weak.
“Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability,” Ford India head Anurag Mehrotra said in the statement.
“The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market,” he said.
Just 2 months ago in July, Ford introduced the compact hatchback Figo to the Indian market and in April this year Ford expanded it presence in the fast growing Indian market with two new dealerships, Adiv Ford at Mathura Road, Delhi and Shree Pawan Ford at Sector 63, Noida, to offer Sales, Service, Spare-parts support to customers in the region.
With these new touch points, Ford India took the total number of Sales and Service outlets in the National Capital Region to a total of 28 outlets.
It must be noted that Ford’s departure in India is only in terms of production and sales will continue via its expanding dealer network.
Ford India has plans to introduced the Mustang-E and more electric vehicles in coming months.
It seems that the American brands have little market knowledge when it comes to manufacturing in India as a pattern seems to have formed here. First there was General Motors as we stated in the second paragraph above. In September 2020, Harley Davidson India (American motorcycle brand) announced its factory closure in India but continued its sales network.
Then now Ford Motor Corporation. Meanwhile, Asian auto manufacturers like Kia, Hyundai, Nissan and Honda are expanding their factories and production and sales are growing as you read this.
Many buyers in the country were waiting for the arrival of the Ford Endevour with a preferred local production price (known as the Ford Everest in ASEAN). They will have to wait and see if the proposed price of ₹ 3 381 600 will be maintained after this announcement.