Ford Will Cease Making Cars In India, Take US$2 Billion Charge

Latest Update- 02/01/2023

In 1994, Ford was one of the first global manufacturers to join our market. The American manufacturer is stopping the manufacture of its cars and SUVs in India after 27 years.

It was reported today that automobile manufacturing for sales revenue will end immediately with Sanand plant-manufactured exports stopping by Q4 2021 and Chennai engine and vehicle plants by Q2 2022.

The company has stated that it will further expand its 11,000-employee Business Solutions team in India in the coming years to service Ford internationally, in addition to maintaining the sale of imported CBU models.

Ford recently closed its manufacturing operations at the Sanand and Maraimalai Nagar India factories for a number of reasons but the primary one is that plant capacity utilization has been appallingly low. The combined annual production capability of the two sites is 4,00,000 units but in recent years Ford has only been able to build 80,000 vehicles with half of them going to export.

Jim Farley president and chief executive officer of Ford Motor Company stated in the press statement stated demand for new vehicles has been substantially weaker than expected despite Ford making major investments in India over the last ten years.

With these low production rates and the fact that the Sanand plant was originally planned to match Ford's international standards, it has been found to be too expensive to produce vehicles for our market successfully at that plant.

The Maraimalai Nagar plant did allow more cost-effective production too. Even keeping this single plant that manufactures the EcoSport and Endeavours two of the most popular models of the brand is not financially viable. This is particularly true when you take into account Ford's old line-up in India the poor demand for its selection and the lack of any new mass-market models in the future.

Last Updated- 10/9/2021

Ford Motor Company will close its care facilities in India, incurring a $2 billion restructuring expense. The manufacture of vehicles for sale in India will be halted immediately, affecting around 4,000 workers. Ford took this choice because of years of losses, overcapacity in the sector, and a lack of expected growth in India's car market. Last year, Ford India's value was written down by around $800 million.

Mahindra & Mahindra have been in negotiations with Ford regarding taking over the company's Indian operations. Ford was one of the first international manufacturers to enter India when the country's economy opened up in the early 1990s. In addition to Mustang coupes, the company will import and sell Figo, EcoSport, and Endeavour vehicles until dealer inventory is depleted. The business is still considering selling its manufacturing assets in the country. The company was formed in 1926 but went out of business in the 1950s.