Ford becomes 5th carmaker to quit Indian market in 10 years

Ford Motor became the third American auto major and the fifth overall, to quit India within the last decade. The decision to close the company’s two plants in Chennai and Sanand by the second quarter of next year was taken as the carmaker could not find a ‘sustainable path forward to long-term profitability, according to the Times of India.

“It was a very difficult decision,” Ford India Managing Director Anurag Mehrotra was quoted in a report by The Times of India. According to Mehrotra, the company tried to explore all available options such as partnerships, platform sharing and contract manufacturing with other automakers, however, despite these efforts, it was not able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing, the report added.

Mounting Losses

The publication also quoted Jim Farley, the global CEO of Ford Motor Co. saying, “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.”

The report said that in India’s automobile market, the fifth-largest in the world, where manufacturers such as Maruti, Hyundai, Tata Motors and Mahindra had reaped in large dividends and where newcomers such as South Korea’s Kia Motors and China’s MG Motors, had also made a solid opening, Ford had accumulated losses worth $2 billion over the past one decade.

The company officials were quoted by the TOI as saying that Ford will continue to invest in India’s ‘Ford Business Solutions’ program where its 11,000 employees are engaged in data science, software development and accounting.

Ford’s market share had remained stuck at 2% due to its non-performing middle-market offerings.

Presently, with the three American auto-makers out, India had become an all-Euro-Asian affair.

Quitting the Indian market

At the end of 2017, General Motors stopped selling cars in India. It arrived in India through its Opel line of cars and in 2003 it replaced Opel with its Chevrolet brand. But Chevrolet lost out to Maruti Suzuki, Hyundai and Mahindra.

The Italian major Fiat, with offerings such as Punto, Linea, etc., also stopped appealing to Indian customers. In January 2019 it stopped manufacturing and in March the following year, it ceased all operations.

Motorcycle brands such as UM motorcycles and Harley Davidson also left the Indian market in October 2019 and in September 2020 respectively. Premier Automobiles was another successful brand of the yesteryears with cars such as Fiat, Peugeot. However with rising competition it started losing out in the
market share and by the end of 2018 filed for bankruptcy.