Ford Quits Production in India over Poor Sales

Ford quits production and manufacturing in India leaving everyone in shock. Ford calls it quits in India after a loss in sales and money. Making cars and Motor Vehicles for Indians is not fitting well anymore with Ford, the American Auto Giant.

So, another iconic brand Ford quits India after the exist of Harley-Davidson and General Motors.

At the end of 2017, GM faced a solid loss and stopped the sales of Cars in India. They sold both of their factories to China’s SAIC Motor Corp. In 2019, another company left India, the Motorcycles brand Harley-Davidson faced a loss of 150 Crores rupees to their dealers.

Since 1995, Ford is present in India with having a total investment of $2.5 billion. Ford is ending 2020-2021 selling 48,042 units to gather a piece of 1.8% of shares.

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Shut Down in Chennai & Sanand after Ford Quits

The brand is promising the “Restructuring” of its business in India. The two plants in Sanand and Chennai will shut down by next year June.

This does not mean the ending of services and after-sales support for loyal customers. There are roughly $1million customers Ford has in India and it’s the 300-odd dealership will remain available for services.

MD and president of Ford India, Anurag Mehrotra said, “This is fairly a difficult decision for us. No matter what we investigate and try to do, our projections are showing we will continue to provide sub-optimal returns to investors and shareholders. So there is no option left, but to restructure”.

He said this as he indicates a new strategy that includes the beginning of import and sales of “must-have, iconic vehicles”. It also includes Mustang Coupe.

Ford Quits after Several Efforts Failed

Ford is claiming that the decision is because of considering a variety of options that didn’t work out for them.

The options include platform sharing, partnerships, manufacturing contracts with other brands, and potentially selling their manufacturing plants, which is still in discussion.

Mehrotra adds, ” Despite our efforts, the company has not been able to find a path that’s sustainable. Also, that forwards to the long-term profitability that includes vehicle manufacturing in the country”.

The country will see the 4,000 permanent employees of Ford moving out from India.

The company said, “Ford will work closely in future with suppliers, unions, dealers, government, employees, and other stakeholders in Sanand and Chennai. To develop a fair and balanced strategy to reduce the effects of this decision”

Danger of Unemployement

Dealers are fear that excluding the jobs at Ford, more than 40,000 employees at the brand’s retail points will also face danger around their status of employment.

The President of dealer’s association FADA, Vinkesh Gulati is saying that the Ford dealers have already invested around 2,000 crores Indian rupees in service infrastructure and retails.

FADA said, “The retail fellowship is fairly shocked to hear Ford’s announcement in which they said that the production is shitting down”

On Thursday the announcement makes it final while the fair warning was present for several months.

Also read: Has India Run Out Of Jobs? 4 Solutions

Ford Lost in Pace

Ford is reportedly lost to grow in a market where other brands like Hyundai, Mahindra, Maruti, and Tata Motors, derived in payback.

Newcomers like China’s MG Motor and Korean Kia also succeed to get a well-founded opening, despite the late start off in 2019.

Ford lost a lot of money nearly $2billion. The company is taking an interest to invest where the cash will not sink as it’s doing in India.

However, the exit carries out is over $1.7 billion, including several settlements, separate the non-cash charges of $0.3billion.

The ‘Ford Business Solution’ program in India will continue even after the exit.

The closure comes just after some time of failed effort to forge a JV with M&M. The partnership started in 2019 was called off by Mahindra on the last day of 2020.

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