Ford India to shut down both vehicle manufacturing factories; Sanand engine factory to continue
With close to $2 billion accumulated loss and falling volumes, US carmaker Ford Motor Company's Indian subsidiary held a town hall for its employees to announce its plan to curtail manufacturing operations in India. The decision will impact over 4000 employees as Ford will cease to be a mass-market brand in the country.
The top management told employees that it would rapidly "ramp down" production of its popular models made in India, such as Ford Figo, Ford Freestyle in India.
The hastily organised townhall by the Indian management of Ford reflected the woes of the US carmaker's journey in India, where it has been struggling amid weak domestic volumes, falling exports and lack of new products for the domestic market. It follows the lines of General Motors, which exited India in 2017.
However, the company will retain its engine plant in Sanand, Gujarat and continue to service its products in India. Sources said that the company would continue to sell its marquee Ford Mustang and Ford Endeavour in India.
The decision on the shutdown is taken as the Indian operation is understood to have posted over 1-1.5 billion dollars of loss and write off in the last couple of years alone, and sustaining future operation independently was seen as unviable.
While the manufacturing will continue for seven coming quarters, the company finds buyers for both its factories.
The Sanand plant, operating at less than 10% capacity, is likely to be shut first. In contrast, the Chennai plant may continue to make cars until 2022 to serve the pending global orders and the consolidated Indian operation.
However, the company will continue to stay in India with just niche models with completely knocked down or completely built cars. It will continue to serve the existing customers.
The Ford Business Centre and the product development centre that caters to the global operation will continue to operate. Even the engine plant that produces mid-size panther engines for global operation will continue to operate.