Ford Finally Quits India


Akash1886

Honoured Member
Joined
Sep 7, 2014
Messages
11,936
Likes
14,774
Location
Delhi-NCR/ Mumbai
Ford Restructures India Operations: Plans to Grow Ford Business Solutions; Serve Customers with Iconic Global Vehicles; Cease Local Vehicle Manufacturing

  • Ford plans to significantly expand its 11,000-employee Business Solutions team in India in coming years to support Ford globally; team to focus on engineering, technology, and business operations centres of excellence

  • Ford India will cease manufacturing vehicles for sale in India immediately; manufacturing of vehicles for export will wind down at Sanand vehicle assembly plant by Q4 2021, and Chennai engine and vehicle assembly plants by Q2 2022; Ford will work closely with employees, unions, dealers and suppliers to care for those directly impacted

  • Ford plans to serve customers in India with must-have, iconic vehicles, including Mustang coupe. Customers in India also will benefit longer term from the Company’s plan to invest more than US$30 billion globally to deliver all-new hybrid and fully electric vehicles, such as Mustang Mach-E

  • India will remain home to Ford’s second-largest salaried workforce globally; in addition to Ford Business Solutions, Ford India will continue engine manufacturing for export, as well as full customer support operations with service, aftermarket parts and warranty support

  • Ford India’s restructuring will advance the Ford+ plan for growth and value creation by strengthening automotive operations and capitalizing on unprecedented opportunities in electric and connected vehicles and enhanced customer experiences

Ford in India today announced it will restructure its operations with plans to significantly expand its Chennai-based Ford Business Solutions team and bring to market some of Ford’s iconic global vehicles and electrified SUVs while ceasing vehicle manufacturing in India.

Ford will continue to provide customers in India with ongoing parts, service, and warranty support. As part of the plan, Ford India will wind down vehicle assembly in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022.

Following accumulated operating losses of more than $2 billion over the past 10 years and a $0.8 billion non-operating write-down of assets in 2019, the restructuring is expected to create a sustainably profitable business in India.

Ford will focus on growing its Ford Business Solutions capabilities and team in the country, as well as engineering and engine manufacturing for export. With more than 11,000 team members currently in India, Ford Business Solutions plans to expand to provide more opportunities for software developers, data scientists, R&D engineers, and finance and accounting professionals, in support of the Ford+ plan to transform and modernize Ford globally.

More than 500 employees at the Sanand Engine plant, which produces engines for export for the best-selling Ranger pickup truck, and about 100 employees supporting parts distribution and customer service, also will continue to support Ford’s business in India.

Ford will begin importing and selling must-have, iconic vehicles, including Mustang coupe. Customers in India also will benefit longer term from the Company’s plan to invest more than $30 billion globally to deliver all-new hybrid and fully electric vehicles, such as Mustang Mach-E. Sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold.

Ford will continue full customer support operations for these vehicles with service, aftermarket parts and warranty coverage.

“As part of our Ford+ plan, we are taking difficult but necessary actions to deliver a sustainably profitable business longer-term and allocate our capital to grow and create value in the right areas,” said Jim Farley, Ford Motor Company’s president and CEO. “Despite investing significantly in India, Ford has accumulated more than $2 billion of operating losses over the past 10 years and demand for new vehicles has been much weaker than forecast.

“I want to be clear that Ford will continue taking care of our valued customers in India, working closely with Ford India’s dealers, all of whom have supported the company for a long time. India remains strategically important for us and, thanks to our growing Ford Business Solutions team, will continue to be a large and important employee base for Ford globally.”

Anurag Mehrotra, president and managing director of Ford India, added: “Ford has a long and proud history in India. We are committed to taking care of our customers and working closely with employees, unions, dealers and suppliers to care for those affected by the restructuring.”

Ford India said it took these restructuring actions after investigating several options, including partnerships, platform sharing, contract manufacturing with other OEMs, and the possibility of selling its manufacturing plants, which is still under consideration.

“Despite these efforts, we have not been able to find a sustainable path forward to long-term profitability that includes in-country vehicle manufacturing,” Mehrotra said. “The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market.”

Approximately 4,000 employees are expected to be affected by the restructuring. Ford will work closely with employees, unions, suppliers, dealers, government, and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to mitigate the effects of the decision.

Ford India will maintain parts depots in Delhi, Chennai, Mumbai, Sanand and Kolkata and will work closely with its dealer network to restructure and help facilitate their transition from sales and service to parts and service support.

Ford India will maintain a smaller network of suppliers to support engine manufacturing for exports and will work closely with other suppliers to ensure a smooth wind-down of vehicle manufacturing. Ford also will continue to rely on India-based suppliers for parts for its global products, and suppliers and vendors supporting Ford Business Solutions will continue to support the business as normal.

“We are grateful to our dedicated team in India who have undertaken many actions in recent years in an attempt to position the company for profitability and growth,” said Steven Armstrong, transformation officer, South America and India. “Our ability to refocus our presence in India is a result of their building our expertise in low-cost engineering, global engine manufacturing quality and business services.”

In connection with this announcement, Ford currently expects to record pre-tax special item charges of about $2.0 billion, including about $0.6 billion in 2021, about $1.2 billion in 2022 and the balance in subsequent years. Within that total will be about $0.3 billion of non-cash charges, including accelerated depreciation and amortization. The remaining cash charges of about $1.7 billion will be paid primarily in 2022 and are attributable to settlements and other payments.
Regards
Akash
 
Joined
Sep 5, 2011
Messages
943
Likes
999
Location
Hyderabad
Finally we'll be Missing the iconic ENDEAVOUR SUV. Sad to see Ford exiting Indian low cost Market. It is a lesson for companies who cannot think local and are rigid in their choices.

But anyway high end imports will continue, but I am sceptical about costumer acceptance for imported FORD Products as th y will lack the Premium ness for German and Japanese marques.


IMG-20210909-WA0070.jpg
 

mayankdixit

Honoured Member
Joined
May 16, 2014
Messages
1,885
Likes
3,360
Location
kanpur
What will happen to existing Ford car owners??
What will happen to resale??
Who will promise spares and service when the parent himself quits and runs away???
What will happen to recent car purchasers??

Also:
Who will take care of the thousands of unemployed people?


Also one more:
Suppose my car and the whole batch has a manufacturing defect and needs a recall in future. Who will do it? Since there is no one to initiate the recall!!

Damn you Ford. All you Americans are good at running away from responsibilities, military or business. And always leave a mess behind.
 
Last edited:

350Z

Core Team
Joined
Aug 10, 2009
Messages
21,193
Likes
7,835
Location
New Delhi
So, the recent speculations turned out to be true. It’s an anticipated move that’s adversely going to affect numerous people including employees, consumers and dealers. FADA has issued a statement sharing their plight.

As a Ford owner, I’m particularly concerned about re-sale value and timely availability of critical components. On the flip side, if someone is still keen to own a Ford, it’s a good time to get an Endeavour with hefty discounts.​

FADA said:
The Federation of Automobile Dealers Associations (FADA) today released a Press Statement on account of Ford India’s shocking announcement.

Commenting on Ford India’s Announcement, FADA President Mr Vinkesh Gulati said, "The Auto Retail fraternity is really shocked to hear another US Auto Major, Ford India's announcement where it has said that it will shut down production with immediate effect. While trying to handle Dealer anxiety, Ford India President & MD, Mr Anurag Mehrotra called me personally and assured that they will adequately compensate Dealers who continue to offer vehicle service to customers. Though this is a good beginning, it is not enough as there are ~170 Dealers who in-turn have ~391 outlets and have invested ~Rs 2,000 Cr for setting up their dealerships. While Ford India employs 4,000 people, Dealerships employ around 40,000 people without displacing them from their home locations thus being continuously skilled and up-skilled all this while.

Ford India Dealers currently hold ~1,000 vehicles which amount to ~Rs 150 Cr via inventory funding from reputed Indian Banks. They also carry Demo Vehicles which are 100's in numbers. Moreover, Ford India also appointed multiple dealers until 5 months back. Such Dealers will be at the biggest financial loss in their entire life!

FADA has been requesting Governing of India to roll out Franchisee Protection Act as due to its unavailability, Auto Dealers are not adequately compensated like their counter parts in Mexico, Brazil, Russia, China, Indonesia, Malaysia, Japan, Italy, Australia, Sweden and many other countries, where this law exists. After General Motors, Man Trucks, Harley Davidson, UM Lohia and multiple fly by night Electric Vehicle Players, Ford India is the 5th biggest exit from Indian markets since 2017.

Parliamentary Committee on Industry in its report number 303 which got released in December 2020 had recommended Ministry of Heavy Industries that the Government should enact the Franchise Protection Act for Automobile Dealers in the country, so that it is a win-win for both, the Auto Original Equipment Manufacturers (OEMs) as well as the Auto Dealers, but will also be beneficial to customers in the long run.”
Drive Safe,
350Z
 
Thread Starter #7

deville_56

Honoured Member
Joined
Sep 11, 2009
Messages
2,971
Likes
4,807
Location
Trivandrum
What will happen to existing Ford car owners??
What will happen to resale??
Who will promise spares and service when the parent himself quits and runs away???
What will happen to recent car purchasers??

Also:
Who will take care of the thousands of unemployed people?


Also one more:
Suppose my car and the whole batch has a manufacturing defect and needs a recall in future. Who will do it? Since there is no one to initiate the recall!!

Damn you Ford. All you Americans are good at running away from responsibilities, military or business. And always leave a mess behind.
They promise support for current owners. Having a Chevy and 2 Fords at home, not shocked [lol]. There would be spare/service support for sure, but can turn costlier over time, Chevy lesson. As long as spares are there, we are not bothered.

Resale will plummet for sure. Ford already suffered from resale, save for may be EcoSport. Positive side of that was, we got our Fiesta for cheap. My next pick would be a Freestyle or Figo, now more affordable [:D] with people disposing of for whatever they can fetch. EcoSport, we are not bothered about disposing and use it for full 15 years, by the time ICE would be obsolete.

Unlike GM, Ford is staying back with the engine manufacturing and imports. So spares and service shouldn't be a problem. (What they say in repeat mode).

For recent purchasers, they are promising warranty and support. (Again repeat mode).

Chennai plant employees will be hurt and might be compensated well, but their future [cry]. Sanand plant will continue with engine manufacturing and import, but a part of the workforce will be hurt though they are mentioning restructuring them.

Ford and Chevy are always surprised me with their recalls. Fiestas steering lines and door hinges were replaced at 8th year of ownership at a random visit for service. Chevy replaced pedals and battery clamps and wiring, again at a random visit, 5th year. With other brands, I got to know from forums about replacement and had to run behind them to check whether we are eligible before even them considering replacement. Hope this trend will continue moving forward as well.

Ford reassuring again and again that they won't leave and will support existing customers, but if the import idea bombs, everything will be screwed for sure, but hope they will support like Chevy for 10 years as per rules.

Intuition says the last American to leave soon. How long will they sell a single model (which hardly sells now)? Cheap doppelgänger of their import model available at half price. Especially American brands failed to understand India. Ford had fun to drive and solid feeling cars, but they rarely updated their product line. Chevy thought India means cheap (but parts were expensive). (Maruti used to push one model for generations and felt heat from Hyundai and keeps updating their product line).
 
Joined
Sep 5, 2011
Messages
943
Likes
999
Location
Hyderabad
When FORD plans to stop local manufacturing, but plans to stay around, I am a little amused.

Why maybe your typical question.

1. I wonder how much would CBUs priced compared to German and Japanese counterparts?
2. When CBUs are priced higher than 30 lakhs, and will people show willingness in buying them as they attract 100% tax?
Coz FORD cars don't carry the Premium appeal of Germans or Japanese cars. They are considered as mid range cars.

Instead FORD should not have shut down the plant but should have imported CKDs or SKDs and assembled here that would have kept the plant running and widened the product range and also kept the prices in control as CKDs/SKDs cost lower in import tax.
Mahindra imports SKDs for REXTON aka ALTURAS G4 and kept the prices lower than TOYOTA's FORTUNER.

Secondly, whether FORD will be planning to introduce premium brands like LINCOLN to move up the desirability quotient.
 
Last edited:
Joined
Jan 28, 2013
Messages
2,478
Likes
2,970
Location
MH46/AP28-TS07/TN14
Kind of Knee jerk reaction. Chevy, Ford or American companies dont wait to pull the plug. Looks like more of cultural or rather ruthless corporate culture. Pull the plug is easy for Americans i feel. Why would any one buy a CBU import paying hefty duties on the cars? rather why wont they opt for the more established luxury brands ? Tesla too is looking the CBU route rather than assembling which makes exits rather super easy.
Ford i feel has to be blamed itself for the mess. Look at Chinese MG, or Korean Kia how well they are doing in the similar or rather even pricier segment than ford was operating in and doing number much higher than what ford did in even in its hey days. High handedness seems to have done in for the ford.
For that matter look at Renault and Nissan how they brought india specific cars and they are best sellers for them.
 
Joined
Dec 27, 2012
Messages
1,038
Likes
619
Location
KA 20
No matter how Ford makes it look, They effed up.

They will sell CBUs which is exorbitantly (150%?) taxed. But cant sell all their sub four meters 1 liter engined tax exempted models!
 
Joined
Jan 28, 2013
Messages
2,478
Likes
2,970
Location
MH46/AP28-TS07/TN14
Now imagine who gains from this move by ford.
Endeavour used to sell around 500 copies every month. Assume Fortuner takes bulk of it say 400
each fortuner costs say 30L avg with this move Toyota will make additional 120Cr per month or say 1440 Cr per year by doing nothing. toyota marketing team must have gifted ford management handsome parting gifts.
 
Joined
Nov 19, 2014
Messages
2,253
Likes
1,311
Location
Trivandrum , Sydney
Said repeatedly the same, Ford's marketing and market analysis was worse. See you launch a facelift of a product at exactly the time when competitors launch a new model. You give features of the budget car, while the market commands more premium.
This has been the case with every model Ford has launched, except Endeavour, as Endeavour at the time of launch had only one rival which was Fortuner, then came updated Tucson, CRV. I was a person who supported Ford, for its superb service and products. But ditching a customer and going off is say playing with your reputation. What we can say is Ford will remain the enthusiast's favorite, even after the brand exits: Only Ford lovers will buy it, no layman will enter that territory.
 
Joined
Sep 5, 2011
Messages
943
Likes
999
Location
Hyderabad
Absolutely true.
Problem is that established companies consider themselves premium and don't sync with the market times. They think that they can sell with thier reputation.

Same issues with VW-SKODA, TOYOTA and HONDA that led to the miserable sales numbers. ETIOS, thought a wonderful product, but let down by too much cost cutting citing profit margins. They have their egos coming in the way of throwing features in mass market segment.

That's why they have failed in mass market segment.
 
Thread Starter #14

deville_56

Honoured Member
Joined
Sep 11, 2009
Messages
2,971
Likes
4,807
Location
Trivandrum
CBU sounds like fake assurance to fool the dealers to stay on for the time being (as well as the customers). The idea will bomb for sure [:D]. Best example being the 50-lakh Evo X.
(or just a way to make us feel they didn't betray us [frustration] in case they wanna come back, may be switching to all electric cars. FIAT and GM did many escape and return numbers).
 
Joined
Sep 5, 2011
Messages
943
Likes
999
Location
Hyderabad
CBU sounds like fake assurance to fool the dealers to stay on for the time being (as well as the customers). The idea will bomb for sure [:D]. Best example being the 50-lakh Evo X.
(or just a way to make us feel they didn't betray us [frustration] in case they wanna come back, may be switching to all electric cars. FIAT and GM did many escape and return numbers).
Maybe something like Getting BRONCO at 35-40 lakhs will appease buyers back to Ford Showroom.
 

Top Bottom