In a recent company statement, Ford India announced that they are shutting down their Sanand and Chennai vehicle manufacturing plants; a decision that will impact 4000 employees. However, it is learnt that Ford will continue selling Ford Mustang and Ford Endeavour in India in the Indian Market, and their engine factory at Sanand will continue manufacturing.
Following the lines of General Motors, which shut down its Indian operations 4 years back in 2017, American Car Maker Ford Motor Company’s Indian subsidiary is all set to end its 26 years of vehicle manufacturing in India. The top management informed its employees that it’s planning to ramp down manufacturing of popular models like Ford Figo and Ford Freestyle, from its Chennai and Sanand plants.
For the last couple of years the company has accumulated huge losses of over $ 2 billion, and with falling sales volume, the company has taken this drastic step. During 2019 the company wrote down $0.8 billion of non-operating assets, largely due to the poor performance from the Indian market, and its exports. Ford India enjoys a market share of 1.8%, as of now.
Commenting about the development Anurag Mehrotra, Head of Ford India said that despite their efforts, Ford in India has not been able to find a sustainable path forward to long-term profitability. He further stated that the current decision was due to the accumulated losses, continuous industry overcapacity, and the lack of expected growth in India's automotive market.
Running at 10% capacity, the Sanand plant will be the first one to shut down, and the Chennai plant is expected to continue its manufacturing till 2022, still it completes its pending orders. Ford India is expected to find new purchasers for both of its facilities.
The direct impact of this shutdown will be on 4000 employees and their families, associated with Ford India, and many indirectly associated with the US carmaker. Ford Business Centre in India, its product development centre, Sanand engine plant which produces mid-size panther engine for its global operations will remain operational.
