Ford to stop making cars in India: Only global models including Mustang to be sold

As part of the plan, Ford India will wind down vehicle assembly in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022.

By:Updated: Sep 09, 2021 4:23 PM
2021 Ford Figo AT red

Ford Motor Company today announced an operational restructuring under which it will be ceasing vehicle manufacturing in India. It will continue to serve its existing customers with service, parts and warranty. The company states that it will now only import low-volume premium products in India like the Mustang. As part of the plan, Ford India will wind down vehicle assembly in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022.

The decision made only earlier this week will affect a large number of employees which Ford promises to look after, including the dealership network. The company promises it will assist its dealers and make sure that their inventory is liquidated and they are sustained and profitable while delivering service to the existing customers.

“We are not exiting the market, this is a restructuring of our business. Our existing customers will have service, spare parts, warranties, repairs and other assistance available to them. An assessment team is working on keeping spare parts available for existing customers for the foreseeable future.”

The dealer stock will be liquidated after which all Ford models that were sold in India that included Figo, Aspire, Freestyle, EcoSport and Endeavour, will be off the market. The bookings that Ford will not be able to honour, the dealership will refund the amount to the respective customers.

Ford will begin importing and selling its iconic vehicles, including the Mustang coupe. It further states that the India market will benefit in the longer term from the company’s plan to invest more than $30 billion globally to deliver all-new hybrid and fully electric vehicles, such as Mustang Mach-E.

Ford’s decision to stop manufacturing here comes following accumulated operating losses of more than $2 billion over the past 10 years and a $0.8 billion non-operating write-down of assets in 2019. The company will, however, keep its engineering and engine manufacturing operations at its Sanand plant ongoing for the export market. This means that over 500 employees at the Sanand Engine plant, which produces engines for export for Ford’s best-selling Ranger pickup truck, and about 100 employees supporting parts distribution and customer service, will continue to be a part of Ford’s business in India.

Also read: Mahindra-Ford joint venture called off due to these reasons

But the company’s restructuring will affect approximately 4,000 employees. Ford promises to 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”.

Ford India will 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.

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