Ford is leaving India: Why Ford leaving India, what went wrong with Ford

“After Fiat, General Motors, UM Motorcycles and Harley Davidson another big automobile company Ford Motors recently announced the closure of its car manufacturing plants based in Gujarat and Tamil Nadu. While they promised to provide spare parts and service to their customers, it is clear that Ford has finally made the decision to quit the Indian automobile market”

 


The joint venture between Ford and Mahindra is officially over, and Ford is now closing two plants in India, one in Gujarat and one in Tamil Nadu. Ford manufactures its five models, which include the Ford Endeavour, EcoSport, Aspire, Figo, and Freestyle, in only two plants across India. 


This legendary American car manufacturer has achieved great success all over the world, but the company has been struggling in India for the past two years, despite the fact that the Ford Endeavour and Ford Ecosport are fairly popular in the country.


So, what went wrong with Ford that forced it to leave the Indian automobile market after completing 26 years? Here is all about why Ford is leaving India with a huge loss of $2 Billion USD (Rs.14,000 crores)?



To get right to the point, the Japanese, Korean, and Indian car manufacturers dominate the Indian car market, with brands such as Maruti Suzuki, Hyundai, Mahindra, Tata Motors, Honda, and Toyota leading the four wheeler market. These companies provide a variety of models in all major segments like sedan, hatchback and SUVs and MUVs. Ford, on the other hand, does not offer a wide range of options in any segment.


Ford operates in 120 countries and offers a wide range of cars, from the Ford Figo to the Ford F150. However, Ford has never been as active in India as it has been in other countries. When Ford returned to the Indian car market in 1995, the Escort was its first model. The Ford Escort was a huge flop due to its underpowered engine and lack of modern features such as power steering in the petrol version and power windows for the rear seats at the time. Furthermore, the Indian government did not support foreign car manufacturers (high taxes and strict policies) as much as it did Indian brands such as TATA and Hindustan Motors at the time. As a result, Ford made a wrong first impression in India.


Returning to the current situation, where Ford is leaving India. Above-mentioned Indian, Japanese, and Korean brands were already outperforming Ford sales numbers when brands such as KIA, MG, and Jeep arrived in India and smashed Ford sales numbers to the ground, resulting in Ford having only a 2% market share in India.



It would be fair to say that Ford has never truly valued the demands of Indian customers. Buyers in India have always been drawn to mileage, maintenance costs, and resale value, and this is where Ford falls short. Ford appears to be lax in terms of product launch in India; additionally, maintenance costs and after-sales service are lacking, which contributes to the low resale value of Ford cars in India. Whereas other brands, such as Maruti Suzuki and Hyundai, offer a variety of options in terms of size and design, these companies have been regularly upgrading their cars and launching new models almost every year, and their maintenance costs are also lower compared to Ford, so their popularity increases the resale value and reliability for Indian roads.


If we talk specifically about the failure of any particular car from the brand itself then Ford Figo Aspire was a great offering, Aspire was safer than its rivals and also fairly powerful. However, Figo Aspire has low sales numbers in India because its rivals like Maruti Suzuki Dzire and Honda Amaze, have appealing looks, better interiors, more features like bigger infotainment system and good mileage. Dzire and Amaze are also more reliable and easy to maintain on Indian roads.


Let us now examine the implications of Ford's departure from India for the country and its people. According to current new18 reports, up to 4000 people are losing their jobs in the company, with 2600 being permanent employees and over 1000 being contract workers. According to reports, it will also have an impact on smaller companies that manufacture spare parts for Ford cars.


Ford is leaving India, which is bad news for the Indian automobile industry because if a large company like Ford does not manufacture cars, the Make in India movement will suffer. Other car manufacturers, such as Maruti Suzuki, Hyundai, Kia, Jeep, Skoda, Mahindra, and Honda, will benefit from Ford's decision.



However, Ford is not completely shutting down operations in India; the company will continue to sell its high-end vehicles, such as the Ford Mustang, as well as provide spare parts and services to existing customers.

Ford has already seen ups and downs in the Indian market, but we hope that Ford will make a comeback in India with a bang, even though Ford is currently leaving the country.



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