As India sales hit low gear, Ford may use factories to make e-vehicles for Ola

Close to winding up manufacturing operations in India, US-based Ford Motor Company is likely to decide on the fate of its factories by the end of 2021.

The carmaker has a plant each in Maraimalainagar, near Chennai, and Sanand in Gujarat. A Times of India report said the company has been in talks with car companies, either to sell the plants, or repurpose them for contract manufacturing. Among the potential candidates is Ola, which may use the plants to make electric cars, said the report. The two Ford plants can produce cars and engines.

“We would not like to comment on speculations,” a Ford spokesperson told ToI. “We continue to assess our capital allocations in India and expect to have an answer in the second half of this year.”

Joint venture with Mahindra

While the contract manufacturing plans have been around for a while now, Ford had put them on pause for a couple of years since it was holding talks with Mahindra and Mahindra (M&M), said the report.

The duo was looking at an alliance covering “cross badging”, wherein M&M would “take care of Ford India’s 4 lakh units per annum capacity” at the two plants, the report quoted a source as saying. The move was expected to help them trim costs and developing and produce vehicles for emerging markets, according to a report in HT Auto.

Also read: Low wages, poor sanitation: Kerala labour dept flags violations by Kitex

However, earlier this year, the discussions with M&M fell through and Ford had to scout for a partner again. The names floating around apart from Ola are Citroen India, MG Motor, Changan and Great Wall.

China-based Changan and Great Wall did seem keen but have, for now, dropped their India plans due to Indo-China border tensions, said ToI.

Sales on bumpy road

Data from the Federation of Automobile Dealers Associations (FADA) revealed that Ford’s retail sales (as calculated by number of vehicle registrations) declined to 2,790 units in June 2021, against 2,872 in June 2020. For May and April 2021, the numbers had stood at 1,671 and 4,214 units, respectively.

The HT Auto report pointed out that Ford is not the lone US automaker struggling in India. General Motors and Chevrolet faced their own hurdles, and the former ended its India operations about four years ago, it recalled. Biker maker Harley Davidson has also failed to see its India plans take off despite its products being popular here.