Ford has announced that the brand is planning to wind down its manufacturing operations in the Indian market with immediate effect. Manufacturing at the Sanand vehicle assembly plant for exports will come to an end by Q4 2021, and Chennai engine and vehicle assembly plants by Q2 2022. However, the company plans to significantly expand its 11,000-employee Business Solutions team in India. The team will support Ford’s global operations in the field of engineering, technology, and business.
Ford Figo, Aspire, Freestyle, EcoSport and Endeavour to Go Out of Production
The brand also announced that the sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold. But it is important to note that the Sanand Engine manufacturing unit in Gujarat will remain operational. The factory will also cater customers with spare parts demand and services. The company will maintain parts depots in Delhi, Chennai, Mumbai, Sanand and Kolkata. The brand also announced that the company plans to serve its customers with Ford Mustang coupe and all-new hybrid and fully electric vehicles, such as Mustang Mach-E in the Indian market.
Ford’s Decision to Shut Down Manufacturing
Ford Motor Company’s Indian subsidiary has accumulated losses of nearly USD 2 Billion over the past 10 years. In 2019 alone, Ford India has registered around USD 0.8 billion of loss and write off. Therefore, sustaining future operations appears to be unviable. The shutting down of manufacturing in India will directly affect more than 4000 employees. Reports suggest that it is not just the weak domestic sales volume, but the export market has also taken a fall.
Ford Factories in India
Ford India possesses a manufacturing facility in Maraimalainagar, Chennai and one in Sanand, Gujarat. The Maraimalainagar plant is built with an investment of around USD 1 billion and spread over 350 acres of land. The plant is capable of producing 2 lakh vehicles and 3.4 lakh engines. The plant in Chennai produces the Ford EcoSport and Endeavour.
The Sanand plant has a manufacturing capacity of 2.40 lakh vehicles and 2.70 lakh engines. The Sanand manufacturing facility is also built with an investment of USD 1 billion and produces the Ford Figo and Figo Aspire. Ford was also in talks with various automobile manufacturers like MG Motors and Ola for contract manufacturing, but it appears that the deal did not come through.