Ford to shut both India factories, to sell only imported vehicles
New Delhi: Ford Motor Co will stop manufacturing cars in India and will shut down both its plants in the country as part of a restructuring of its India business, the company said on Thursday.
“Ford India will cease manufacturing vehicles for sale in India immediately; manufacturing of vehicles for export will wind down at Sanand vehicle assembly plant by Q4 2021, and Chennai engine and vehicle assembly plants by Q2 2022; Ford will work closely with employees, unions, dealers and suppliers to care for those directly impacted,” the company said in a statement.
The company plans to significantly expand its 11,000-employee Business Solutions team in India in coming years to support Ford globally. Its India team will focus on engineering, technology, and business operations centres of excellence.
Ford plans to serve customers in India with must-have, iconic vehicles, including Mustang coupe. Customers in India also will benefit in the longer term from the company’s plan to invest more than US$30 billion globally to deliver all-new hybrid and fully electric vehicles, such as Mustang Mach-E.
India will continue to be Ford’s second-largest salaried workforce globally; in addition to Ford Business Solutions, Ford India will continue engine manufacturing for export, as well as full customer support operations with service, aftermarket parts and warranty support.
“Ford India’s restructuring will advance the Ford+ plan for growth and value creation by strengthening automotive operations and capitalizing on unprecedented opportunities in electric and connected vehicles and enhanced customer experiences,” the company said.
Following accumulated operating losses of more than $2 billion over the past 10 years and a $0.8 billion non-operating write-down of assets in 2019, the restructuring is expected to create a sustainably profitable business in India.
Ford India said it took these restructuring actions after investigating several options, including partnerships, platform sharing, contract manufacturing with other OEMs, and the possibility of selling its manufacturing plants, which is still under consideration. “Despite these efforts, we have not been able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing,” said Anurag Mehrotra, president and managing director of Ford India.
“I want to be clear that Ford will continue taking care of our valued customers in India, working closely with Ford India’s dealers, all of whom have supported the company for a long time,” Mehrotra added.