Ford India has finally decided to end its vehicle manufacturing operations in India, and here’s everything you need to know about it.
Ford no longer feels that it would be profitable to continue making cars in India
Ford India has shocked the Indian auto industry by announcing its decision to cease local vehicle manufacturing. The company will no longer make cars in India and says that it will now focus on expanding the Ford Business Solutions team, as part of its major restructuring programme. Now, one of the main reasons why Ford took this decision is because the company no longer feels that it would be profitable to continue making cars in India. While Ford had planned to enter into a joint venture with Mahindra to avoid this situation, but that did not materialise. Now the company has finally decided to end its production operations in India, and here’s everything you need to know about it.
Also Read: Ford To Cease Local Production In India, Shut Down Both Plants: Report
- Pulling the plug on local production essentially means all Made-In-India cars like the Figo, Freestyle, Aspire, EcoSport and Endeavour will be discontinued. Sales of these current products will cease once existing dealer inventories are sold out. However, Ford will continue to offer after-sales support for these vehicles like – service, aftermarket parts and warranty coverage.
Also Read: Ford And Mahindra End Collaboration On All Projects In India
- For existing Ford customers things will largely remain the same. While Ford will no longer sell locally made cars in India, its parts and service operations will continue as part of regular business. In fact, instead of being a sales & service touchpoint, Ford’s dealer network will now offer parts and service support. However, the resale value of the Ford car will start taking major hits.
Also Read: From The Editor’s Desk: Ford Should Stay In India, But For the Right Reasons
- In terms of the product plan, Ford now plans to import and sell models from its global lineup, including the Mustang coupe. Ford is investing over $30 billion globally to develop new hybrid and fully electric vehicles like the Mustang Mach-E, however, right now it’s unclear whether those will come to India or not.
- The company will continue to make vehicles for the export market at its Sanand plant until the end of 2021. As for the Chennai plant, that will continue to make engines and vehicles for the export market till the second quarter of 2022. However, Ford’s Sanand Engine plant will continue to produce and export engines for the Ranger pickup truck. Also, Ford will maintain its parts depots in Delhi, Chennai, Mumbai, Sanand and Kolkata.
- Approximately 4,000 employees are expected to be affected by the restructuring. Ford says that 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. Ford will retain 500 employees at the Sanand Engine plant, and about 100 employees for supporting parts distribution and customer service.
- Given the company’s plan to make engines for the export market, Ford will maintain a smaller network of suppliers to support engine manufacturing. Ford says that it will also continue to rely on its India-based suppliers for parts for its global products, while suppliers and vendors supporting Ford Business Solutions will continue to support the business as normal.
- With regards to Ford Business Solutions, the company says it will focus on growing its team in the country, as well as engineering and engine manufacturing for export. The company says that this will provide more opportunities for software developers, data scientists, R&D engineers, and finance and accounting professionals.
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