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Ford Motor will end car production in India, take $2 billion hit

Ford Motor Co will end producing in India and take a hit of about $2 billion as it doesn’t see a way to productivity in the country, becoming the latest automaker to leave a significant development market dominated by Asian opponents.

The decision by Ford comes after it battled for years to prevail upon Indian purchasers and make profit. The carmaker entered India 25 years prior yet has an under 2% share of the traveler vehicles market.

In its statement, Ford said it gathered operating losses of more than $2 billion in 10 years in India and demand for its new vehicles had been weak.

“Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability,” Ford India head Anurag Mehrotra said in the statement.

“The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market,” he said.

Ford follows other U.S. carmakers, for example, General Motors and Harley Davidson which have effectively left India, a market that had once guaranteed exponential growth. The nation is dominated by mostly low-cost cars made by Suzuki Motor Corp and Hyundai Motor.

As part of the plan, Ford India will slow down activities at its plant in Sanand in the western territory of Gujarat by the final quarter of 2021 and vehicle and engine manufacturing in its southern Indian plant in Chennai by 2022.

The U.S. automaker will keep on selling some of its vehicles in India through imports and it will likewise offer help to dealers to support existing clients, it said. Around 4,000 representatives are relied upon to be influenced by its decision.

The decision to stop production in India comes after Ford and domestic carmaker Mahindra and Mahindra failed to finalise a joint endeavor partnership that would have permitted Ford to keep producing vehicles at a lower cost than at present yet stop its independent operations.

The organization said the decision to stop production was made in the wake of considering a few different decisions including partnerships, platform sharing, contract manufacturing and the chance of selling its manufacturing plants, which is as yet under review.

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