Why is Ford halting its vehicle production in India | Details explained with video
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- personNabin Pradhan
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Multinational American automaker Ford has announced to halt the production of its vehicles in India. Ford, which entered India in 1994, has announced it will stop manufacturing vehicles in the Indian market after 27 years of a long journey.
Ford has said it will immediately stop producing Ford cars and SUVs for sale in the local market and will also stop exporting from the end of this year. The Chennai-based engine and vehicle plant will be shut down from the second month of 2022.
Ford has said it will continue to maintain its presence in the Indian market despite the shutdown. For this, it will trade by importing Ford's CBU models from other countries. Ford has also announced the deployment of 11,000 employees for this.
Why is Ford Stopping its production in India?
When it entered the Indian market 27 years ago, Ford had come up with a very ambitious plan. Accordingly, it had installed two plants with a capacity of producing 400,000 cars annually. But as the market demand did not increase as expected, it never produced as much as it could.
At present, Ford is producing only 80,000 units of cars annually. This is only 20 percent of its production capacity. Half of this production relied on export.
Jim Farley, CEO of Ford Motor Company, said that despite their substantial investment in India, the firm has lost over $2 billion in the last decade, which shows the negative turn of the company.
In this video below, we have explained why Ford is taking this step and its possible impacts on the Nepal market in detail?
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