The end of Ford India.
Ford an American auto maker which entered the Indian market in October 1995 with the 50-50 partnership with Mahindra and Mahindra group and registered as Mahindra Ford India Ltd. After the opening of Indian economy in 1991 . Where later on the ford India take the holding in the company and named as Ford India Ltd. Right now ford India is having two manufacturing plant in India one in Gujarat and another in Chennai.
After operating for 25 year in India now the ford India announced to take exit from Indian market and it is going to Stop there manufacturing by quarter 4 in Gujarat and by 2022 in Chennai. In last 25 year the company has been invested over $2 billion dollars in India for setting up there market. The brand is not able to attract the customer and it also faced problem in understanding the Indian market. In last 25 year the brand always faced up and down, some time the sales of car hits and some time it doesn't.
Major problem faced by ford India are-
1. Less Demand- The demand of ford cars are not good in India market. The ford is having less than 2% stake of automobile industry in India.
2. High price- the price of cars are not up to Indian market. Where the average buying capacity of Indian is 8 lakh and most of the cars of ford India are priced above 8 lakh on road.
3. Failed Joint venture- In 2019 after facing loss the ford India started talk with Mahindra and Mahindra in regards of joint venture. The brand aims to make low cost cars with Mahindra and Mahindra. But at the last stage of joint venture the Mahindra group take step back and denied to join ford India.
4. Not able to understand Indian Roads- In India the roads are not up to level of USA. The cars which ford is manufacturing are not made for Indian roads.
5. High cost maintenance- The Indian wants the car which is very cost effective. The spare parts of Ford India are very expensive than the competitors like Maruti Suzuki. The accessories are also not available easily. And the fuel efficiency is also not good. Low average and high cost service.
Ford India also export the Made in India engine and cars to 35 countries such as USA, Nepal, South Africa ,Canada , Mexico and Saudi Arabia etc.
As per the report the ford manufacturing plant might be purchased by MG motor. MG motor is showing there interest in Ford India manufacturing. The company are making deals together. Right now the brand talk are in early stage. According to the study of credit rating agency India Ratings and research claims that the ford India is having a ₹600 crore approx. As a differed sales tax liabilities in India.
The shutdown of ford India resulting in loss of 4,000 jobs directly and thousands of jobs indirectly. It is very challenging for Indian government that the MNC are taking exit from India. where from last one-half year of COVID-19 pandemic lots of people lost there jobs in manufacturing sector and now ford India is also taking exit. In India the unemployment scale is continuously rising.
It is second US brand which is stopping there manufacturing after Harley Davidson. And some other brands has also stopped the manufacturing in India like MAN trucks and General Motor.
Thank you..