Team News Riveting
Chennai, September 10
Even as fate of over 4000 employees now hang in a balance after Ford decided to cease production, the American carmaker is exploring other options to keep its brand on roads.
The company said the decision to cease production was made after considering several other options, including partnerships, platform sharing, contract manufacturing and the possibility of selling its manufacturing plants, which is still under review. The Tamil Nadu government said it would facilitate the parley and would ensure quick transfer of land to the new owner if Ford handover the vehicle and engine manufacturing units located in Chennai.
As part of the plan, Ford India will shut down operations at its plant in Sanand (Gujarat) by the fourth quarter of 2021 and vehicle and engine manufacturing at its Chennai plant by 2022.
The decision by Ford comes after it struggled for years to win over Indian consumers and turn a profit. The company entered India 25 years ago but has a 1.8 per cent share of the passenger vehicles market. Largely, the Indian automobile market is dominated by Japan’s Maruti Suzuki and South Korea’s Hyundai, both of them together constitutes 60 per cent of total market share.
On the other hand, Ford managed to have a market share below 2 per cent since last many years. Earlier, Ford had exited from the Brazilian market.
In its statement, Ford said it accumulated operating losses of more than $2 billion in 10 years in India and demand for its new vehicles had been weak. “Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability,” Ford India head Anurag Mehrotra said.
Ford follows other US carmakers such as General Motors and Harley Davidson which have already left India, a market that had once promised exponential growth. The country is dominated by mainly low-cost cars made by Suzuki Motor Corp and Hyundai Motor.
