Ford India is not going through its best phase, and with the market share dwindling due to high competition in the market, the renowned American automaker has now announced the immediate closure of its manufacturing facilities for local sales. The brand will also wind down its export manufacturing at the Sanand plant by the end of this year, and the Chennai engine & vehicle plants by the second quarter (Q2) of 2022. The brand has revealed that in the last 10 years, the company has incurred a loss of about US $ 2 billion.
Ford has also announced that it will continue to have a presence in India and will serve existing customers with service, aftermarket parts and warranty coverage. However, the sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will discontinue once existing dealer inventories are sold. While the number of Ford dealerships may decrease in the near future, some of them will remain operational to sell imported models, including the Mustang coupe. The brand could also bring its all-new hybrid and fully electric vehicles, such as Mustang Mach-E to our shores via the CBU route.
Ford will also maintain its 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 & service to parts & service support.
Besides, Ford Business Centre and its product development centre will also continue to operate in India. The brand has stated that it will expand its business solutions team as well as engineering & engine manufacturing for export that will support Ford globally. With more than 11,000 team members currently in India, Ford Business Solutions plans to increase to provide more opportunities for software developers, data scientists, R&D engineers, and finance & accounting professionals, in support of the Ford+ plan to transform and modernize Ford globally. It will also continue to rely on India-based suppliers and vendors for parts for its global products.
The restructuring is expected to create a sustainably profitable business in India.
Commenting on the termination of Ford's local manufacturing facility, 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. 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 company, nearly 4,000 Ford employees are assumed to be affected by the restructuring move. However, the brand has assured that they 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.
