Ford will stop making cars in India – sources

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A visitor is reflected while taking pictures of a new Ford Aspire car during its launch in New Delhi, India on October 4, 2018. REUTERS / Anushree Fadnavis

NEW DELHI, September 9 (Reuters) – Ford Motor Co. (FN) will stop making cars in India and close its plants in the country, two sources told Reuters, becoming the latest manufacturer of cars that left a market still dominated by Asian rivals.

One source added that the American carmaker made the decision because it was not profitable for it to continue, adding that the process is expected to take about a year to complete.

Ford is the latest vehicle manufacturer to stop production in India, after US companies like General Motors (GM.N) and Harley Davidson (HOG.N) have already left a market which had previously promised exponential growth.

Ford has struggled to win over frugal buyers in India and make profits in a market dominated mainly by low-cost cars manufactured by Suzuki Motor Corp (7269.T) and Hyundai Motor (005380.KS).

The American carmaker will continue to sell some of its cars in India by importing fully built vehicles and demolished units, the second person said, adding that it would also provide support to dealers to serve existing customers.

Ford did not immediately respond to an email seeking comment. He has previously said he would decide on a capital allocation plan for India during the second half of 2021.

Ford will allocate capital in line with its plan to generate consistent cash flows and achieve an adjusted EBIT margin of 8% (earnings before interest and taxes), the company told Reuters earlier.

The decision to cease local production came after Ford ended its partnership with domestic vehicle manufacturer Mahindra & Mahindra (MAHM.NS), a move that would have ended most of Ford’s independent operations in India. , but that would allow it to launch new vehicles faster, at a reduced cost. and with a smaller investment.

Ford entered India 25 years ago, but has a 2% share of the passenger vehicle market in the world’s second most populous nation.

Aditi Shah Reports; Edited by Sanjeev Miglani and David Clarke

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