Ford India announced on Thursday that the US-based automaker will cease manufacturing vehicles in India as part of its restructuring plans. The company stated it will wind down vehicle assembly in Sanand by the fourth quarter of FY22 and vehicle and engine manufacturing unit in Chennai by the second quarter of 2021-22.
Ford India said around 4,000 employees are expected to be affected by the restructuring. The automaker has said it will 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.
Sales of current Ford products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold, the company said in an official statement. It is expected to continue full customer support operations for these vehicles with service, aftermarket parts, and warranty coverage.
Ford India explained that it has taken these restructuring actions after investigating several options, including the possibility of selling its manufacturing plants, which the firm adds is still under consideration. The firm had accumulated operating losses of more than $2 billion over the past 10 years.
"Despite these efforts, we have not been able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing," said Anurag Mehrotra, President and Managing Director of Ford India. "The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India's car market," he added.
The firm will maintain parts depots in Delhi, Chennai, Mumbai, Sanand and Kolkata, and will work closely with its dealer network to restructure and facilitate the transition from sales and service to parts and service support.
"India remains strategically important for us and, thanks to our growing Ford Business Solutions team, will continue to be a large and important employee base for Ford globally," Jim Farley, Ford Motor Company's President and CEO, said
The firm said it will significantly expand its 11,000-employee Chennai-based business solutions team in India in the coming years to support the firm globally. More than 500 employees at the Sanand Engine plant, which produces engines for export, and about 100 employees supporting parts distribution and customer service, also will continue to support Ford's business in India.
As part of the restructuring plans, the automaker intends to bring to the Indian market some of its iconic global vehicles, including the Mustang coupe. It added that its customers in India will benefit longer term from plans to invest more than $30 billion globally to deliver all-new hybrid and fully electric vehicles, such as Mustang Mach-E.
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