Ford to close factories in India after losing more than $2 billion

Ford to close factories in India after losing more than $2 billion
© Greg Nash

Ford Motor Company announced on Thursday that it will stop manufacturing vehicles in India after losing more than $2 billion over the past 10 years. 

The company said vehicle assembly at its plant in Sanand will shutter by the fourth quarter of 2021 and that vehicle and engine manufacturing at its facility in Chennai will end by the second quarter of 2022.

Ford will still provide customers in India with ongoing parts, service and warranty support, the company noted.

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They anticipate the restructuring — which is estimated to impact roughly 4,000 employees — will “create a sustainably profitable business in India," according to a statement from the company.

Ford will now “focus on growing its Ford Business Solutions capabilities and team in the country, as well as engineering and engine manufacturing for export.”

Ford said that the more than 500 employees who work at the Sanand plant and 100 others who support parts distribution and customer service will “continue to support Ford’s business in India.”

“Despite investing significantly in India, Ford has accumulated more than $2 billion of operating losses over the past 10 years and demand for new vehicles has been much weaker than forecast,” Ford President and CEO Jim Farley said in a statement.

Anurag Mehrotra, president and managing director of Ford India, said that despite other efforts made — including partnerships platform sharing, contract manufacturing with other original equipment manufacturers and potentially selling its manufacturing plants, which is still being considered — the company was not able to find a sustainable way to uphold operations.

“Despite these efforts, we have not been able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing,” Mehrotra said in a statement.

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“The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market,” he added.

Ford, according to Reuters, controlled less than 2 percent of the passenger vehicles market in India. Suzuki Motor Corp. and Hyundai Motor reportedly dominate the market.

The company is now the latest automaker to leave India, following General Motors and Harley-Davidson, Reuters noted.