US car giant Ford will stop making cars in India and shut down both its plants in the country, the company announced in a statement on Thursday. The company will, however, continue to sell imported products and offer services to its existent customers.
The Sanand plant in Gujarat that manufactured the Ford Figo, the Figo Aspire along with the Freestyle will be shut by the fourth quarter of 2021. The older plant at Maraimalai Nagar in Chennai that made the Endeavour and the Ecosport will be shut by the second quarter of 2022. It will, however, continue to manufacture engines from its Sanand plant which will be exported to the company’s global operations.
The decision will impact over 4,000 employees even as around 500 workers at the Sanand engine plant and about 100 employees in supporting parts distribution and customer service will continue to support the business.
The firm, which was one of the earliest companies to enter the Indian market about 25 years back, is the latest US biggie to leave in recent years.
In 2017, General Motors stopped making cars for the Indian market. Last year, Harley-Davidson stopped manufacturing and massively scaled back its sales operations in what is the world’s biggest motorcycle market.
“As part of our Ford+ plan, we are taking difficult but necessary actions to deliver a sustainably profitable business and allocate our capital to grow and create value in the right areas,” Ford Motor Company’s president and CEO Jim Farley said in a statement.
Ford had run up operating losses of more than $2 billion over the past decade in India and demand for its vehicles had weakened, he noted.
“Ford will continue to take care of our valued customers in India, working closely with the dealers. India remains strategically important for us and, thanks to our growing Ford Business Solutions team, will continue to be a large and important employee base for Ford globally,” Farley stated.
The Federation of Automobile Dealers’ Association (Fada) voiced its shock and concern over another US auto major quitting production in India. Fada president Vinkesh Gulati said, “There are about 170 dealers who in turn have about 391 outlets and have invested around Rs 2,000 crore to set up their dealerships.”