Ford has decided to put an end to its industrial activity in India. After more than 25 years, Ford will stop producing cars in India. The manufacture of vehicles for local sale will be stopped immediately while production for export will continue until the second half of 2022 at its facilities in Sanand and Chennai.
Bad news for the Indian auto industry. One of the first giants in the automotive sector that decided to bet on India has announced that it is putting an end to its industrial activity in that territory. Ford to stop making cars in India, 27 years after entering the market. This announcement is of vital importance since it directly affects thousands of employees who today work in the production centers.
Ford has put an end to the production of vehicles for the Indian market. However, and for a short period of time, it will keep manufacturing cars destined for export. Specifically, manufacturing for export will be reduced to its plant located in Sanand until the last quarter of the year. Chennai’s motor and vehicle plants will be closed in the second half of 2022.
Ford will not abandon the Indian market
Just because Ford is going to stop bringing ‘Made in India’ cars to life does not mean that the iconic blue oval signature will be leaving this market. Ford will continue to import high-volume vehicles for local sale. What’s more, it has announced that it will significantly expand its business solutions team over the next few years.
One of the main reasons that have precipitated the decision to close these facilities is none other than the low workload. Combined, the Ford vehicle production centers in Sanand and Maraimalai Nagar, which will also be closed, have barely reached 20% of their capacity. And what is equally important, half of the vehicles manufactured have been destined for export.
Jim Farley, Ford CEO, stressed that, despite the multi-million dollar investments that have been carried out in India, the brand has been reporting operating losses in the last 10 years. And demand for its models has been much weaker than initially anticipated. In the near future Ford will focus primarily on importing niche models, as it does in Australia and Brazil. This opens the door to models like the new Ford Bronco and the new generation Ford Ranger.
In the recent past, Ford opened the door to establish an alliance with Mahindra, one of the largest Indian car manufacturers, in order to maintain its industrial activity. However, the negotiations collapsed and this possibility was finally ruled out.
Ford sales in India
Throughout the turbulent year 2020 the Ford sales in India they reached 45,799 units, making it the ninth most popular car brand. It outperformed rivals as strong as Volkswagen and Skoda. In this fiscal year, between the months of January and July 2021, Ford accumulated a total of 31,972 registrations, which places it in ninth position.
Ford EcoSport and Ford Endeavor are the brand’s best-selling models in India. And both are produced locally at Ford’s facilities in Maraimalai Nagar. Until July 2021 the EcoSport accumulates 20,393 units sold, while the Endeavor reaped 5,389 registrations.