Ford is following other US carmakers like General Motors and Harley Davidson out of the Indian market which once promised great growth. The firm will likely experience a $2 billion bit. Here’s the full story.
Ford says bye to India
Ford Motor Co will stop manufacturing in India as it does not see any profit in the country. The carmaker will leave a great market, dominated by other Asian rivals. The reveal comes after the automaker tried hard to win over Indian consumers and make a profit. However, despite entering the market over 25 years ago, the firm makes less than 2 percent profit.
Moreover, the firm stated that it has had operating losses costing over $2 billion in the past decade. Additionally, the demand for Ford’s new cars is weak. “Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability,” stated Anurag Mehrotra, the Ford India head. “The decision was reinforced by years of accumulated losses. Persistent industry overcapacity, and lack of expected growth in India’s car market,” he added.
US automaker does not fit well in Indian markets
The automaker follows others such as General Motors and Harley Davidson from the world’s biggest market. The firm is trying to wind down operations in India in Gujarat by the end of 2021. Additionally, the vehicle and engine manufacturing plant in Chennai, Tamil Nadu will stop by 2022. However, the US carmaker will continue to sell some models in India by Imports. Ford also promised to provide service to customers and support for dealers.
Despite promising great potential, the Indian market does not gel well. Currently, the country’s market is dominated by low-cost cars from Hyundai Motors and Suzuki Motor Corp. Unfortunately, this will affect about 4,000 employees adversely. The reveal comes at a time when Ford and Mahindra & Mahindra failed to finalize a venture partnership. This partnership had the potential to allow the automaker to continue in India. The automaker declared that the decision to wind up was made after considering all partnerships. However, the firm may plan on selling its manufacturing plants.