Ford to end manufacturing in India, is likely to incur $2 billion loss

Sept 10, 2021: Ford Motor Company will shut down manufacturing in India and incur a loss of about $2 billion because it does not see a way to profitability in the country.

Ford’s decision comes after years of struggling to win over Indian consumers and make a profit. The carmaker entered India 25 years ago but has a market share of less than 2%. In a statement, Ford said it had accumulated more than $2 billion in operating losses in India over 10 years and that demand for its new vehicles remained weak.

“Despite (our) efforts, we have not been able to find a sustainable way for long-term profit, this decision is reinforced by the accumulated losses over the years, the industry’s continued oversupply and the lack of expected growth in India’s car market,” Anurag Mehrotra, Ford India chief said. 

Ford follows other American carmakers, such as General Motors and Harley-Davidson, who have already left India, a market that once promised growth. The country is dominated by low-cost Suzuki and Hyundai cars.

According to the proposed plan moving forward, Ford India will shut down its plant at Sanand in the western state of Gujarat by the fourth quarter of 2021 and its South Indian plant at Chennai by 2022.

The decision to suspend production in India comes after Ford and domestic carmaker Mahindra & Mahindra failed to finalize a joint venture partnership that would have allowed Ford to continue production at lower prices for the time being while pausing independent operations.

The company said the decision to halt production came after considering several other options, including partnership, platform sharing, contract manufacturing and the possibility of selling its manufacturing plants, which are currently under consideration.

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