HomeBusinessWhy US Carmaker Ford Is Shutting Manufacturing Plants In India

Why US Carmaker Ford Is Shutting Manufacturing Plants In India

Why US Carmaker Ford Motor Is Shutting Manufacturing Plants In India

Ford is the fifth automaker which has introduced to cease manufacturing in India.

After working for 25 years in India, American auto main Ford Motor Co has determined to tug the plug on native manufacturing. The US automaker mentioned that it might “take a hit of about $2 billion as it does not see a path to profitability in India.” The firm, which has as soon as tasted success with fashions like Ikon, Figo and EcoSport, has at present a passenger autos market share of lower than 2 p.c. Ford India will wind down operations at its plant in Sanand in Gujarat by the fourth quarter (This autumn) of 2021 and car and engine manufacturing in its Chennai plant by 2022.

Ford is the fifth automaker which has introduced to cease manufacturing in India after MAN Trucks, General Motors, Harley Davidson and UM Motorcycles. Also, Honda Cars India shut its facility in Greater Noida, Uttar Pradesh. The Japanese carmaker discontinued its CR-V and Civic fashions within the nation. However, Honda has one other facility (Tapukara plant) in Rajasthan which continues to be operational.

Here’s why Ford determined to finish manufacturing in India:

* Weak demand: Ford mentioned it accrued working losses of greater than $2 billion in 10 years in India and demand for its new autos had been weak. Ford India head Anurag Mehrotra mentioned, “Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability.”

* Low-cost vehicles: India’s automotive market is principally dominated by vehicles from Maruti Suzuki India and Hyundai Motor India. Ford, however, struggled for years to show worthwhile in India. Ford and Hyundai entered India within the mid-Nineties. But the 2 corporations have an entire totally different destiny when it got here to enterprise. While Hyundai changed into the nation’s second-largest participant and Ford is shutting down its manufacturing ops.    

* Failed JV effort: Ford and Mahindra & Mahindra did not finalise a three way partnership partnership that might have allowed the US auto main to proceed producing vehicles at a decrease value. 

* End of highway for Mustang and Endeavour in India? No, the US automaker said that it’s going to proceed to promote a few of its high-priced vehicles in India (Mustang and Endeavour) by imports and it’ll additionally present help to sellers to service current clients.

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