Ford Motor Co (F.N) will stop manufacturing in India and take a hit of about $2 billion as it does not see a path to profitability in the country, becoming the latest automaker to leave a major growth market dominated by Asian rivals. The company will immediately stop the production of existing vehicles for the domestic market and will end export operations at its Sanand and Chennai plants by Q4 2021 and Q2 2022, respectively.
The company earlier this year announced that it is looking for a new partner for its India operations. However, approximately 4,000 employees are expected to be affected by the restructuring. The company will work closely with employees, unions, dealers and suppliers directly impacted by this move. Meanwhile, Ford India plans to serve customers with iconic vehicles, including the Mustang coupe. Ford will continue to sell existing vehicles like EcoSport, Endeavour, Figo, Aspire, and Figo Freestyle till the stock lasts and no new vehicle will be manufactured. The company urns out that India isn’t a profitable market for Ford from an investment viewpoint, leading to the company’s decision of ending its operations in India. The company had accumulated operating losses of over $2 billion and a $0.8 billion non-operating write-down of assets in 2019. Still the company will continue to provide after-sales and service support to the customers in India. However, the company will have a lesser number of customer touchpoints in the country and the dealerships will be converted into service entities.
Ford India will maintain parts depots in Delhi, Chennai, Mumbai, Sanand and Kolkata and will work closely with its dealer network to restructure and help facilitate their transition from sales and service to parts and service support. It will also maintain a smaller network of suppliers to support engine manufacturing for exports and will work closely with other suppliers to ensure a smooth wind-down of vehicle manufacturing.
