While there are rumours of Ford Cars Getting Discontinued in India, we have given a clear report of the situation to help you dismiss the speculations
The Indian automotive industry is facing a huge slowdown that is frightening for most manufacturers. And then, there are rumours about Ford planning to shut its operations in India and exit the country, as the Chevrolet did a couple of years back. With the slump in sales, the ROI trajectory for the manufacturers is appalling and foreign brands are finding it tough to survive in the price-conscious Indian market that is ruled by Maruti Suzuki's affordable products. But, the case here for Ford is way different than what it was for Chevrolet and all the rumours regarding Ford Cars getting discontinued in India can be safely laid to rest.
To save the losing investment due to ever diminishing sales figure, Ford will sell its assets to Mahindra as a part of the joint-venture.
The Michigan based auto-giant is in news about ceasing its country operations. There are even some rumours on Ford Cars getting discontinued in India However, these rumours are true only to a slight extent. Ford is planning to dilute its current domestic institution in a bid to start operating from a new organization. The new organization that will take care of the Ford brand in India and will be in a form of Joint-Venture between Ford and Mahindra & Mahindra.
The JV between the two auto giants will see a 51% stake ownership by M&M, while the remaining 49% will be held by Ford itself. Even with lesser stakes than Mahindra’s, the Ford will have all the rights to take part in the board decisions and the voting rights for the Ford will also be equivalent to that of M&M.
The Gujrat based export-only factory is still under review, whether it will be a part of the JV or not.
With this JV, one thing is pretty sure, that Ford is not following the trails left by the Chevrolet. Also, it's also clear that the news of Ford Cars getting discontinued in India is incorrect. While Ford India has seen a 31% YoY decline in its sale in Aug-19, the exports, however, have only fallen 11% in comparison to the last year.
Ford is trying to save its 11 Billion USD investments that have been made across the world to encash the opportunities internationally under the supervision of Jim Hackett. That said, Ford plans to sell all of its assets including the Chennai facility which has an in-house capability to produce 2,00,000 cars and 3,40,000 engines annually. If Fords is planning to sell its Gujrat facility is still a question unanswered.
As the Gujrat facility is very new, considering it started operations a couple of years back, and is very near to the port, thus reducing the logistics costs for the exports. The Sanand based unit is used as an export-only unit by the Ford currently and ceasing the global division of the company to get it assessed under the JV, does not seem to be the part of the plan. Though, there are very high chances that Ford will retain the Sanand unit.
With the second inning from 1990, Ford has invested over 2 billion USD to haul India operations.
A clear look at Ford’s history in India reveals the age-old legacy Ford has enjoyed in the country. As the manufacturer first introduced itself to the country in early 1925, but left the nation in 1950 and then made a comeback in the year 1990. So, this time Ford does not have any plans to leave the country by apprehending its domestic operations.
However, the news about the JV is correct, and the deal for the same will be initiated by Ford’s Asia-Pacific headquarters situated in Shanghai. Ford with a 3% market share has a niche customer base that the brand does not wish to lose. Ford and M&M also inked a pact in September 2017 to explore the space for a productive strategic alliance to mutually cater the EV segment in India. While the duo has been already exploring an opportunity, to develop a C-segment mid-size SUV for the emerging markets, which will be placed a segment higher than the Ford Ecosport. All said and done, the rumours of Ford planning an exit from the country are baseless and as are the speculations about Ford Cars getting discontinued in India.