In a surprising decision which came from one of the US major motor company Ford, has decided to stop its production in India after it incurred a loss of $2 billion over the last 10 years. As part of its India restructuring plan, the company will also stop manufacturing vehicles for export and will wind down the Sanand vehicle assembly plant by the fourth quarter of 2021 and Chennai engine and vehicle assembly plants by the second quarter of 2022.
After US giant General Motors had stopped selling cars in India in 2017, it is the second major exit of local manufacturing operations in India by a global automotive brand.
Jim Farley, Ford Motor company’s president, and CEO said: “As part of our Ford plus plan, we are taking difficult but necessary actions to deliver a sustainably profitable business longer-term and allocate our capital to grow and create value in the right areas.”
However, the company has assured that it will continue to provide customers in India with ongoing parts, service, and warranty support.
Nearly 4,000 employees are expected to be affected by the restructuring. Two Ford plants in the cities of Sanand and Chennai will shutter in the coming months and the company will “work closely” with employees affected by the closures.
The company has been struggling to elevate in India for a long time, which was the world’s fifth-largest auto market last year. Ford had begun operations in India in 1995 and has invested more than $2 billion in the country over the past 25 years.
But it has barely picked up any market share. Ford’s control of the market stood at roughly 1.8% in July, down from nearly 2.1% a year ago, according to the Federation of Automobile Dealers Associations, a body representing automobile dealers.
Top carmaker Maruti Suzuki — an Indian firm owned by Japan’s Suzuki Motor Corporation — had nearly 45% market share in July, while South Korea’s Hyundai (HYMTF) controlled 17%.