The whole world acknowledges Ford as one the most renowned car companies to exist. However, the company has released a statement that they will no longer carry on with their process of manufacturing cars in India. The production houses in Sanand in Gujarat and Mariamalai Nagar in Chennai are going to terminate their program of car production.
The reason behind the plan of termination by Ford
India has recognized Ford as one of the oldest car manufacturing companies on the premises. It has been operating in the country for the past 27 years. However, they have not been very successful when it came to making a good profit. According to reports, Ford has suffered a loss of over $2bn during the past decade. Moreover, the company has not been very efficient in producing the designated number of vehicles annually either.
Both the manufacturing plants have the capability of producing a total of 4,00,000 vehicles on an annual basis. However, statistics have shown that the manufacturing plants under Ford have manufactured only 80,000 vehicles. Furthermore, the company has used 50% of those produced vehicles for purposes of exportation.
Plan of Action by Ford for their exiting process in India
As of now, Ford is all set to put an end to both of their production houses by the second quarter of 2022. However, Ford has not drawn withdrawal from their business in India entirely. They will continue with their services such as maintenance and warranty for their already existing customers. Moreover, the company will continue with its process of engine production until the second quarter of 2022.
The CEO of Ford, Jim Farley has stated customer’s demand for Ford vehicles has also been minimized in India. This factor has also played a key role in their decision to close down their operating units.
What will the upcoming days look like for the company?
Ford’s decision to close down their units is bound to create some hardships for a lot of people. To be precise, the company’s workers from India’s manufacturing units will suffer a huge loss. This plan of action will have a severe impact on the lives of around 4,000 workers. However, the company has claimed that they will conjure up some sort of understanding that will work in favor of both parties.