Ford has decided to leave another country – India, one of the five largest car markets in the world. The reason was low demand and large losses: over the past decade, they amounted to more than two billion dollars, and further forecasts are disappointing. In this regard, Ford is stopping car production at Indian factories, but will import finished cars into India for some time, Reuters reports.
25 years have passed since the arrival of Ford in India, but during this time the brand has not been able to gain a foothold in the local market dominated by Asian manufacturers. Today, the American brand accounts for only two percent of all sales in the country, despite significant investment.
According to Ford India CEO Anurag Mehrotra, the company has failed to find a path to long-term profitability. In addition to persistently weak demand, the reason for Ford’s departure was the disruption of a joint venture deal with India’s Mahindra & Mahindra, which would have allowed Americans to save on production. In addition, Ford’s priority has shifted from competition for markets towards electrification of the model range and the development of technologies that require large investments.
As part of the plan, by the fourth quarter of 2021, Ford will complete production at its Sananda plant and in Chennai in southern India by 2022. The combined production capacity of both enterprises reaches 440 thousand vehicles per year, but today Ford uses no more than 25 percent of their capacity. The closure of factories will result in the layoff of about four thousand people.
Ford will continue to sell some models in India, but this time through imports, and will also support dealers and will not stop serving existing customers. At the same time, it is noted that the engine plant in Sananda will continue to operate – engines for Ranger pickups are being assembled there.
India is not the only major market that Ford has left in recent years. In 2019, the company left, and in 2021 it stopped production in Brazil, where it had been present for more than a century.