Ford to stop making cars in India after USD 2 billion loss

It's official, Ford will no longer be producing cars in India. This comes after the Blue Oval officially announced that they will be winding down factory operations in the country.

Following accumulated operating losses of more than USD 2 billion over the last 10 years, Ford says it will restructure its operations in India with plans to significantly advance its Chennai-based Ford Business Solutions team. Moreover, the company also plans to bring more of Ford's global vehicles and electrified SUVs to the country.

“As part of our Ford+ plan, we are taking difficult but necessary actions to deliver a sustainably profitable business longer-term and allocate our capital to grow and create value in the right areas. 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,” said Jim Farley, president & CEO of Ford Motor Company.

As a result, approximately 4,000 employees are expected to be affected by the restructuring. To ensure the affected workforce will receive compensation, Ford 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.

Despite stopping vehicle production in India, Ford says that they will continue customer support operations for the locally produced vehicles, as well as imported models. In addition, the company will maintain parts depots in Delhi, Chennai, Mumbai, Sanand, and Kolkata and will work closely with its dealer network to restructure and help facilitate their transition from sales and service to parts and service support.

Ford India will also maintain a smaller network of suppliers to support engine manufacturing for exports and will work closely with other suppliers to ensure a smooth wind-down operation of vehicle manufacturing.

“We are grateful to our dedicated team in India who have undertaken many actions in recent years in an attempt to position the company for profitability and growth. Our ability to refocus our presence in India is a result of their building our expertise in low-cost engineering, global engine manufacturing quality, and business services,” said Steven Armstrong, Transformation Officer for Ford in South America and India.

Following the factory closures, Ford India will only import and sell some vehicles from global markets. Unfortunately, the sale of India-built models like the Figo, EcoSport, and Endeavour will cease once existing units at dealers have all been sold.