| 20 May 2024, Monday |

Ford to end manufacturing in India, take $2 billion hit

Ford Motor Co will halt production in India and take a hit of about $2 billion as it does not see a path to profitability in the country, becoming the latest automaker to leave a major growth market dominated by Asian rivals.

The decision by Ford comes after it strived for years to acquire Indian consumers and turn a profit. The carmaker entered India 25 years ago but failed to gain more than 2 percent share of the passenger vehicles market.

Ford said in its statement, 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 in the statement.

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

Ford follows other U.S. carmakers such as General Motors and Harley Davidson which have already left India, a market that had once pledged exponential growth. The country is dominated by mainly low-cost cars made by Suzuki Motor Corp and Hyundai Motor.

As part of the plan, Ford India will wind down operations at its plant in Sanand in the western state of Gujarat by the fourth quarter of 2021 and vehicle and engine manufacturing in its southern Indian plant in Chennai by 2022.

The U.S. automaker will continue to sell some of its cars in India through imports and it will also provide support to dealers to service existing customers, it said. Around 4,000 employees are expected to be affected by its decision.

  • Reuters