Ford announced in September 2021 that it would cease production in India and wind down its operations in the country, which included the closure of two manufacturing facilities and the cessation of vehicle sales in the market. The decision was primarily driven by Ford’s inability to achieve profitability in India despite years of effort.
Some of the key reasons behind Ford’s exit from the Indian market include:
Low market share: Ford’s market share in India had been declining steadily, reaching just 2% in 2020. This was due to intense competition from local players such as Maruti Suzuki and Hyundai, who have a dominant presence in the Indian auto market.
High production costs: Ford’s operations in India suffered from high production costs due to inefficient supply chains, high taxes and duties, and a highly fragmented market.
Poor sales performance: Despite launching several new models in recent years, Ford struggled to gain traction in the highly competitive Indian market. Its sales volumes remained low, resulting in underutilization of its manufacturing facilities.
Strategic realignment: Ford’s decision to exit India is part of a broader strategic realignment aimed at improving the company’s profitability and focusing on its core markets. The company plans to redirect its investments towards electric vehicles and autonomous technologies, which are considered key growth areas in the global auto industry.
Overall, Ford’s decision to exit India is a reflection of the challenges faced by global automakers in penetrating the highly competitive Indian market, which has a complex regulatory environment and a highly price-sensitive consumer base.
