Ford to Exit from India; take $2 Billion Hit

Story Highlights
  • Ford to shut down manufacturing units in India.
  • The firm has less than 2% share of India's passenger vehicles market.
  • The automobile corp accumulated losses of more than $2 billion in 10 years

Ford Motor Co. has announced to shut down its manufacturing units in India after recording roughly $2 billion in restructuring charges, scaling back significantly in a country that past management saw becoming one of its three biggest markets. The decision by Ford comes after it struggled for years to win over Indian consumers and turn a profit. The carmaker entered India 25 years ago but has a less than 2 per cent share of the passenger vehicles market.

In its statement, Ford said it accumulated operating losses of more than $2 billion in 10 years in India and demand for its new vehicles had been weak. Ford India head Anurag Mehrotra said in the statement, “Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability. The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market.”

However, the moto brand has decided to maintain parts depots in Delhi, Chennai, Mumbai, Sanand, and Kolkata and will work closely with its dealer network to restructure and help facilitate their transition from sales and service to parts and service support.

Approximately 4,000 employees are expected to be affected by the restructuring. Ford will work closely with employees, unions, suppliers, dealers, government, and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to mitigate the effects of the decision, the company added.

This is the second major exit of local manufacturing operations in India by a global automotive brand.  Earlier US giant General Motors, which entered India just a few years before Ford, had stopped selling cars in India in 2017.

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