American multinational automobile manufacturer Ford Motors, headquartered in Dearborn Michigan, United States is winding up its operations in India. Ford presently has two plants in India, one at Marimalai in Southern India and the other at Sanand in Gujarat.

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Reports of Ford India shutting down its plants has been doing the rounds for some time now. Earlier, with the announcement of the Ford-Mahindra joint venture being officially over, the former seemed to be going through a tough phase.

After a close to USD 2 billion accumulated loss and falling demands, US carmaker Ford Motor Company's India subsidiary held a town hall for its employees to announce its plan to curtail manufacturing operations in India. The decision will impact over 4000 employees, a media house quoted.

In a cost-effective and price-sensitive market like India, Ford could never make it big. The US carmaker entered the Indian market some 25 years ago but has a less than 2% share of the passenger vehicles market. In its statement, Ford said it accumulated operating losses of more than USD 2 billion in 10 years in India and demand for its new vehicles had been weak.

But this is not the first time. Previously, US carmakers General Motors and Harley Davidson also left India, a market that had once promised exponential growth. In a market like India, the best bet still remains mainly low-cost cars made by Suzuki Motor Corp and Hyundai Motors.

If Ford India and domestic carmaker Mahindra and Mahindra could crack a deal and start a joint venture partnership, it would have given a new lease of life to Ford Motors as it could continue producing cars at a lower cost than its present costing but would cease its independent operations.

What led to this decision

No new model of Ford cars have been launched for quite some time in India.

Except for their SUVs like the EcoSport as well as Endeavour, most of the other cars don't seem to be the first choice for many buyers. 

Last year Ford India was supposed to launch the Figo automatic and finally, after a long wait, the car was launched this year in July last week.

The second-gen Figo was already late in coming to our market with no significant feature or powertrain advantage over the competitors.

To sustain in a cut-throat competition, Ford either needed to lower the price of its cars or keep introducing new and feature-loaded cars in the market. 

If Ford would have kept the price of its cars lower, the margin of profit would be less but its demand in the Indian market would rise for being economical.

Figo automatic which was launched in July is a bit late to the segment which already has the Hyundai i20, Maruti Suzuki Baleno, and the Volkswagen Polo.

Ford India's two plants in the country, Marimalai in Southern India and Sanand in Gujarat are said to be underutilized at the moment.

Speculations are ripe that the fast-growing Ola electric branch might want to acquire these plants and start with their highly ambitious manufacturing plans.

What Happens to Ford Car owners?

Ford has said that it will continue to provide vehicle aftermarket parts, service facilities, and warranty support to its customers in India.

The US automaker will maintain car parts depots in Delhi, Chennai, Mumbai, Sanand, and Kolkata.

It will closely work with its dealer network to restructure and help facilitate its transition from sales and service to parts and service support.

What Ford Models will continue and discontinue  

Ford India sells five models in India - Ford Figo, Ford Aspire, Ford Freestyle, Ford EcoSport and Ford Endeavour.

The sale of all these five models will stop once the existing dealer inventories are sold.

Sale of the current portfolio to continue till stock lasts, Ford India said in its tweet.

The Ford EcoSport and the Ford Endeavour have been the two largest-selling models of the automaker in India.

However, Ford will import and sell vehicles, including the Mustang coupe and Mustang Mach-E, in India.