Ford ceases production in India, to continue with import sales and business operations
Ford India will shut down local manufacturing operations in the country effective immediately at its two plants in the country in Sanand, Gujarat and Chennai. The company will, however, continue its presence in the country by expanding its Ford Business Solutions outputs engaged in white-collar operations like research, development and business activities while a small engine export operation will also be maintained. The brand will restrict sales in India in the future to CKD and CBU imports of its higher-end global models like the Ford Mustang sports car and the Ford Mustang Mach-E electric SUV.
Effect on Ford's current products and service
As for its current products, sales of the Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold. Ford India will maintain parts depots in Delhi, Chennai, Mumbai, Sanand and Kolkata while the existing dealer network will be restructured to transition from sales and service to parts and service support.
As mentioned, Ford will continue a small sales presence in the country by bringing in its higher-end international offerings either as CKDs or CBUs. Aside from the Mustang range, this could also include its hot hatches like the Focus ST and performance pick-ups like the Ranger Raptor.
Ford India manufacturing wind-down, layoffs
Ford's export vehicle assembly operations at its Sanand plant will wind down by the end of 2021 while vehicle and engine manufacturing in Chennai will end by the middle of 2022. This will lead to about 4,000 employees being laid off. The company promises that it will work closely with employees, unions, suppliers, dealers, government, and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to aid them through this situation. The Chennai plant has a capacity of 2 lakh vehicles and 3.40 lakh engines and manufactures the Ford Ecosport and Endeavour. The Sanand facility manufactures the Ford Figo, Aspire and Freestyle and can produce 2.40 lakh vehicles and 2.70 lakh engines. This is expected to shift to the Chennai facility post the shuttering of this plant.
The company will continue with a small engine manufacturing operation in India to supply the Ranger pick-up truck globally. This will employ over 500 employees and will be supplied by a smaller network of suppliers. India will continue to remain a hub for its global supply chains as well as its global technology and business operations.
Ford Business Solutions
Ford's business in India will now be largely focused on the Ford Business Solutions organization in the country. Employing over 11,000 employees, this will continue to remain Ford's second-largest salaried workforce globally. This arm is engaged in technological and business solutions for the group's global operations and will be expanded with more software developers, data scientists, R&D engineers, and finance and accounting professionals.
Ford India losses
The decision to shut large-scale manufacturing and sales operations comes after Ford India recorded over USD 2 billion dollars in losses in the country over the last 10 years. Ford India had been engaging with manufacturers like Citroen and MG to begin a contract manufacturing arrangement given its excessive idle manufacturing capacity. The deal with Mahindra was meant to safeguard its position in the country, but with Mahindra choosing to reassign resources once the pandemic hit, Ford has been left high and dry without a sustainable plan for the Indian market. The company is still open to the possibility of selling its India plants. Ford's India operations have remained stagnant of late, the Ford Ecosport and the Ford Endeavour both have continued to be steady sellers but with no new products in the sub-four-metre SUV or mid-sized SUV segments, the company has lost market share to rivals. According to FADA, retail sales stood at 3,604 units in August, accounting for a meagre 1.4 per cent chare of the market. This figure stood at 3,463 units in August 2021.
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