Ford to shut its two manufacturing plants in India; official announcement expected soon

US-based automobile manufacturer Ford Motor Co has said that it will be shutting its two manufacturing plants in India. Remarking that it will now only sell imported vehicles in the country as a part of a recontructing exercise, people aware with the development told PTI that it will stop selling vehicles such as he EcoSport, Figo and Aspire, which are produced from these plants. 

Ford to shut its manufacturing plant in India

Stating that Ford would only sell imported vehicles like Mustang in the coutry, a person told PTI, "This is a restructuring decision, where the company will shift to imported vehicles." However, a formal annoucement by the company is expected soon, he added. It is important to note here that Fprd has been struggling for years to make a mark in India's automotive market. 

As of now, Ford India has an installed manufacturing capacity of 6,10,000 engines and 4,40,000 vehicles a year. It also exported its models such as Figo, Aspire, and EcoSport to over 70 markets around the world. Earlier in January this year, Ford Motor Co and Mahindra & Mahindra had decided to scrap their previously announced automotive joint venture and instead chose to continue independent operations in India.

In October 2019, the two companies had announced an agreement under which Mahindra & Mahindra will acquire a majority stake in a wholly-owned arm of Ford Motor Co (FMC) that will take over the automotive business of the US auto major in India. This new entity was to develop the markey and distribute Ford brand vehicles in India, while selling Mahindra and Ford cars separately as well. 

Ford is the second American auto major after General Motors to shut their manufacturing plants in India. Earlier in 2017, General Motors had also anounced that it would stop selling vehicles in India as there was no turnaround in its fortunes here as the brand had to struggle for over 2 decades to make its mark in the Indian market. 

Besides Ford and General Motors, iconic American motorcycle maker Harley Davidson last year had announced that it has finally decided to discontiue its manufacturing operations in India due to its failed efforts to gain a foothold in the world's biggest motorcycle market. Earlier, Harley Davidson moved its manufacturing plants to cheaper locations across the country following the advice of its executives that moving to cheaper locations will help in reducing the manufacturing cost as well. But, the motorbike manufacturer did not yield the desired results. This decision involves a cost of over $75 million in reorganising its manufacturing units, around 70 redundancies and closed its only manufacturing plant in Bawal, Haryana. 

(With inputs from PTI)

(Image: Twitter-@FordIndia)