Ford Exiting India! -No More To Car Manufacturing

September 9, 2021

A recent company statement from US car giant Ford indicated the plan to stop making cars in India and shut down both of its plants in the country.

Ford said it would close the plants in Gujarat and Tamil Nadu states by the second quarter of 2022 but it would continue to make car engines for export. The firm is the latest big car firm to leave India in recent years.

In 2017, General Motors (GM) stopped making cars for the Indian market. And last year, Harley-Davidson stopping manufacturing and massively scaled back its sales operations in what is the world's biggest motorcycle market.

These exits have been a blow to Indian Prime Minister Narendra Modi's efforts to lure or retain foreign manufacturers.

Ford had run up operating losses of more than $2bn (£1.5bn) over the past decade in India and demand for new vehicles had weakened, the firm said.

The carmaker, which manufactured five models for the local market, said it would continue to provide maintenance services, parts, and warranty support to existing customers.

Ford would also "shift to iconic global vehicles and electrified SUVs in the future", the statement said, although it was not clear whether they would be made in India.

Ford has been manufacturing cars in India for 25 years, but it has struggled to compete.

According to reports, it has a share of less than 2% of the passenger vehicles market, and the firm is ranked ninth on the list of the country's biggest carmakers.

Analyst View

The 25 years business foray of Ford into India, the second-most populous country on earth is gradually coming to an end on the back of decade-long operating losses and plummeting demand for new vehicles. This is a blow to the economy of India and a follow-after of General Motor's exit four years ago. The exit represents the exit of foreign direct investment (FPI) which the leadership of the country desire.

SOURCE:BBC