Ford Motor Company has planned to stop manufacturing cars in India as a reduction in profitability occurred in the country.
Ford had struggled all these years to win over consumers for profit as the growth market in the country had been dominated by Asian rivals.
The US multinational automaker company entered India 25 years ago but have a less than 2% share of the passenger vehicle market.
The move to stop production in India comes after a failure to finalize a joint venture partnership between Ford and domestic carmaker Mahindra & Mahindra. The deal would have allowed Ford to continue producing cars at a lower cost than currently.
The Indian consumer market consists mainly of low-cost cars made by Suzuki Motor Corp and Hyundai Motor.
In its statement, Ford informed about the accumulated operating losses of more than $2 billion in 10 years in India adding that the future demand for its new vehicles had been low.
Ford India head Anurag said, “Despite efforts, we have not been able to find a sustainable path forward to long-term profitability,”
The head added, “The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market,”
Ford will continue to import some of its cars in India and it will also provide support to dealers to service existing customers. An estimation said that around 4,000 employees are to be affected by its decision.
The company said the decision to cease the production has been taken after considering options like partnerships, platform sharing, contract manufacturing, and the possibility of selling its manufacturing plants, which is still under review.