Approximately 4,800 Ford Motor Co. employees, both staff and workers, will have an uncertain future as the US car manufacturer will cease producing cars in India immediately and shut down both of its plant locations. As part of a restructuring effort, the company stated that it would only sell imported vehicles in the country.
Sources within Ford Motor Co said the decision was taken as Ford Motor Co is not making profits in India, and in the interest of its shareholders, Ford Motor Co has shut down its operations in India. It will take one year to complete the shutdown operation.
‘Ford India will cease producing vehicles for sale in India, as well as manufacturing vehicles for export, by Q4 2021 at Sanand vehicle assembly plant, and by Q2 2022 at Chennai engine and vehicle assembly plant’, Ford India said in a statement. In addition to reorganizing its operations, Ford India plans to establish a Ford Business Solutions team in Chennai and launch some of Ford’s iconic global models, like the electrified SUVs, while ceasing car manufacturing in India.
The company has invested about USD 2.5 billion in its Chennai (Tamil Nadu) and Sanand (Gujarat) plants and will stop producing vehicles such as the EcoSport, Figo, and Aspire that are produced at these plants. The company will only sell imported vehicles in the country, such as Mustangs. Currently, Ford India’s Chennai plant has about 2,700 associates (permanent workers) and about 600 employees, while the Sanand plant will have about 1,500 employees. Ford India will continue to manufacture engines in Sanand for export, according to a union official.
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Ford Motor Co and Mahindra & Mahindra scrapped their previously announced automotive joint venture in January of this year and chose to continue independent operations in India. In October 2019, the two companies announced an agreement in which Mahindra & Mahindra will acquire a majority stake in a wholly-owned arm of Ford Motor Company (FMC) that will take over the automotive business of the US auto major in India.
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