Ford will stop making cars in India after posting a loss of about $2 billion. The automaker is the latest manufacturer to leave the local market, already dominated by Asian rivals.
Ford’s decision comes after having struggled for years to win over Indian consumers and make a profit. The automaker entered India 25 years ago but has less than 2% of the passenger car market.
Ecosport, which stopped being produced in Brazil in January, after Ford announced the closing of the respective factories in our country, is still made in India, from where it is exported to Argentina. Created in Brazil, the compact SUV is also manufactured in Romania, Russia, China and Vietnam.
Ford India also still produces the compact Ka and Ka Sedan, equally discontinued in the Brazilian market.
In a statement, Ford said it had accumulated operating losses of more than $2 billion over 10 years in India and that demand for its vehicles was weak.
“Despite (our) efforts, we have not been able to find a sustainable path to long-term profitability,” Ford India head Anurag Mehrotra said in a statement.
“The decision was reinforced by years of accumulated losses, excess industrial capacity and lack of expected growth in India’s auto market,” he said.
Ford follows other American automakers, such as General Motors and Harley-Davidson, which have already left India – a market that promised exponential growth. However, the country is mainly dominated by low-cost cars made by Suzuki and Hyundai.
As part of the plan, Ford India will shut down operations at its plant in Sanand in the fourth quarter of 2021 and its vehicle and engine manufacturing plant in south India in Chennai in 2022.
The US automaker will continue to sell some of its cars in India through import and will also support dealers to serve existing customers, it said. About 4,000 employees are expected to be affected by the decision.
The decision to stop production in India comes after Ford and domestic automaker Mahindra failed to finalize a joint-venture partnership that would have allowed Ford to continue producing cars at a lower cost than today.
The company said the decision to end production was taken after considering several other options, including partnerships, platform sharing, manufacturing contract and the possibility of selling its factories, which is still under consideration.
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