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Ford to shut shop in India after Mahindra deal?

Written by Nizam Shaikh

The 6th largest car maker in India, Ford began operations in India in 1926 and in 1954 was shut down due to losses. Ford re-entered the Indian market with an alliance with Mahindra & Mahindra a 50-50 joint venture and slowly increased its share to 72% in 1998 and Ford India Private Limited and has been in India working independently since more than 2 decades.

Ford launched several models in India, the Ford Escort, Ford Ikon, Ford Mondeo, Ford Fusion and Ford Fiesta. Currently, Ford is selling the Ford Figo, Freestyle, Figo Aspire, EcoSport, Endeavour and the Made in U.S.A, Ford Mustang, which was launched in 2016.

Most foreign carmakers like Chevrolet have struggled against big market players like Maruti Suzuki. Where Maruti Suzuki sells 42 times more units than Ford.

Now, Ford is restructuring itself to align with Mahindra & Mahindra in a 49-51 joint venture where 51% will be owned by Mahindra & Mahindra and hence will cease operations as an independent company and handover it’s assets and employees to the new entity. According to sources, the deal should close within 90 days. The joint venture could lead to more affordable Ford cars as the company need not pay a royalty to its parent instead the Indian counterpart will have to pay.

Ford has failed to wow or lure customers even though they have great cars. The Figo is a fantastic hatchback, the Freestyle is a good crossover, the EcoSport is the best handling compact-SUV and even the Endeavour is a very likeable 7-seater SUV. So then, even with good cars, what has lead to such a situation? Poor leadership? Because people surely love the cars, but not buying them in desired numbers.