Why Ford Motor is Quitting its Business in India

  • Why Ford Motor is Quitting its Business in India

    Ford Motor has operated for more than 2 decades in India, but now it has decided to turn off the business and local manufacturing here. The US-based motor manufacturer said that there is no concrete vision of profitability in India. The automaker company that has witnessed immense demand with models such as EcoSport, Figo, and Ikon has now only contributed 2 percent share in the automobile market. Ford India will close down its functions and plants in Sanand in Gujarat by the end of 2021 and engine and vehicle manufacturing in its Chennai plants by the starting of 2022.

    Let us know about the reasons behind Ford is closing down its operations and manufacturing plants in India:-

    Low-Cost Vehicles:

    Most car lovers are fascinated by Maruti Suzuki India and Hyundai Motor India in India. Both Maruti and Hyundai Motor largely conquer the car market in India. Moreover, these car manufacturers come with affordable car models, which influence customers to pick them easily. On the contrary, Ford has faced many challenges to generate profit in India.

    Both Ford and Hyundai motor has launched in India’s market in the middle of 1990. But the story of the two automaker companies is entirely separate in terms of business and profitability. While Hyundai has successfully achieved the second-biggest car manufacturer in India, on the contrary, Ford has decided to close down its manufacturing plants in India.

    Unsuccessful Joint Venture:

    In October 2019, Ford and Mahindra announced that they would work as a joint venture in India. The motto of this anticipated joint venture is to reduce manufacturing and developing operational costs of vehicles for budding markets. The final timeline to confirm a joint venture between Ford and Mahindra was 31st December 2021, but both agreed to call the joint venture decision and not expand the deadline to consider it again.

    At the time of the partnership announcement, both automakers said that they anticipated introducing 3 fresh electric vehicles, including a medium-sized SUV, for the rising market.Covid19 has brutally shattered the collaboration dream of both companies as they both have experienced loss and sales decline during the period.

    Heavy Operational Expenses:

    Ford has spent $2 billion to restructure its business but failed to gain profit. Hence due to huge operational loss, it is going to close down manufacturing plants in India; however, Ford will continue to perform business. Considering the operational expenditure and not gaining expected return has forced Ford India to shut down the operation.

    Bottom Line

    Expert says that the decision of Ford closings its manufacturing plants and operation in India won’t affect the Indian automobile business. However, as we have already stated, Ford will continue to sell its imported vehicles in India. Always find an authorized car dealer if you wish to buy any car and Car ki Deal is a reputed car dealer in Delhi NCR. So contact us for any vehicle, whether used or new, and you can find all vehicle models here. 

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