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Ford India has decided to shut down both its manufacturing factories in the country. However, the American brand has not pulled the plug on its entire operations, as it will still continue sales and service.
Speaking about the sales and service, the Michigan based company will continue to sell CKD (Completely Knocked Down) and CBU (Completely Built Up) vehicles in India. Along with this Ford India will continue to support its existing customers with service and spare parts.
According to sources, Ford India may sell premium offerings like the Ford Mustang, Ford Endeavour, or even the Ford Raptor F-150 in India.
However, the sales of more popular models like the Ford Figo, Ford Freestyle and Ford Ecosport will come to a halt gradually.
This means Ford India's operations will continue on the Indian soil but will be limited to a niche category of customers in India.
According to Ford India, manufacturing will continue for the next seven quarters. However, we expect the Sanand plant to close initially as it is already operating at less than 10 per cent of its capacity.
This means the Chennai plant is more likely to continue its production until 2022 to meet the requirements of existing local and global orders. Along with this, the engine plant producing the ‘Panther' engines for the global market will continue in operation.
Ford India's decision to shut down both its manufacturing facilities comes from the 1-1.5 billion dollars of loss and write-offs that accumulated over the past couple of years. With such a huge reported loss, Ford understood that it is unviable to continue its operations in India.
While this decision of Ford may help reduce the overall loss, it comes at the cost of more than 4,000 employees being jobless post shut down.
Ford follows an almost identical situation to the situation faced by General Motors in India when it announced its shut down of India operations back in 2017.
The news regarding the shutdown of the company operations was announced to its employees via a town hall meeting. The top-level management also informed employees that the company would "ramp down" production of Ford's popular models in India, such as Figo and Freestyle.
Ford's exit in the Indian market would also mean that the used car market in India will become more lively as dealers would be looking to capitalise on the situation by falsifying the facts regarding service.
However, bear in mind that a similar situation rose in 2017 and we witnessed how quickly the resale value of Chevrolet cars bounced back.
Along with this, there is no need for hardcore Ford enthusiasts to cancel their plans of buying a Ford as the company will provide service and spare parts back up to its customers.
THOUGHTS ON FORD INDIA'S EXIT FROM THE INDIAN MARKET
It was not only Ford's lack of new products for the Indian market that paved way for Ford's exit in India but the entire sales slump in global automotive during the pandemic period.
Apart from this, Ford India also failed to identify and capitalise on some fast growing segments in India.