Mounting losses have forced US auto major, Ford Motor Corporation, to stop manufacturing cars in India and shut down both its plants at Chennai and Sanand (Gujarat).
The Ford management called a town hall meeting on Thursday (September 9) to inform employees about its increasing difficulties in continuing with its India operations, reported The Economic Times. About 4,000 employees are likely to get affected by the decision, the media house reported, though the Ford management promised that India “will remain home to Ford’s second-largest salaried workforce globally”.
Indirectly, another 5,000 people are likely to be affected by the decision.
Ford is likely to wind up operations in a year, but will continue to provide servicing support, through its dealers, for existing cars. Ford will also continue to manufacture engines for export. A few models will be imported for Indian car users.
General Motors (2017) and Harley Davidson (2020) too had to quit the Indian auto space despite early promises of exponential growth.
Ford was launched in India in 1995. Its Chennai facility (Maraimalai Nagar) manufactures Ford EcoSport and Ford Endeavour. The Gujarat plant (Sanand) produces Ford Figo, Ford Aspire and others.
Employees were told by the management that it would rapidly “ramp down” production of its popular models made in India, such as Ford Figo and Ford Freestyle. Media reports quoted sources as saying that the company would continue to sell its marquee Ford Mustang and Ford Endeavour in India. The Ford Business Centre and the product development centre that caters to the global operation will continue to operate.
Ford India now aims to focus on hybrid and fully electric vehicle models like Mustang Coupe and Mustang Mach-E. “Customers to benefit from Ford’s global plan to invest >US$30 billion towards delivering all-new hybrid & fully electric vehicles,” Ford said in a statement.
The decision on Ford’s shutdown came about as the Indian operation reportedly posted more than $1-1.5 billion in losses and write-offs in the last few years alone.