Car owners panic as Ford pulls the plug on vehicle production in India
Kochi: Ford Motor Co has announced that they will stop vehicle production at its two plants in the country and will sell only imported vehicles as part of the company's restructuring phase. At the same time it is learnt that the company has also assured uninterrupted services for its vehicles and is planning to implement new system to providethe same in the country.
“The company has given the assurance to the owners that the service will be provided. The Ford Managing Director has also assured vehicle owners that they will provide services for 10 years at the same service rate. Moreover, Ford vehicle is bound to receive the warranty, and an extended warranty provided for cars likes Eco sports. Currently, the Ford cars receive around 6 years warranty, so it is highly unlikely that the company will disregard the assurance given to the customers,” said one of the coordination panel members of ECOSCLUB- Ecosport Owners Club Kerala.
The company, which invested about USD 2.5 billion at its Chennai and Sanand plants, has accumulated operating losses of around USD 2 billion in India in the last ten years. However, the latest decision is bound to impact the retails sector and over 4,000 employees and 150 dealer principals who operate around 300 outlets. Not to mention, the latest developments are likely to impact the sale of Ford manufactured cars in the country. However, the company will continue to manufacture engines from its Sanand plant which will be exported to the company's global operations.
“There was panic after Ford made the announcement. For the last several years, there were rumours that the company is planning to wind up its operations in the country. However, the latest development was quite shocking, like a surgical strike. No one expected this,” one-panel member of the club reacted.
It is reported that an 8 member panel is set up by Ford to manage and make decisions pertaining to the sales & service the country. Further, Ford will be addressing the individual opinions from the dealers, and suggestions to sort out how the company will continue to provide service and support in the country.
With shutting down the vehicle manufacturing operations, the automaker will stop selling vehicles such as the EcoSport, Figo, Endeavour, Freestyle and Aspire, which are manufactured from these plants. In an announcement, Ford said it would wind up vehicle assembly in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022.
"As part of our Ford+ plan, we are taking difficult but necessary actions to deliver a sustainably profitable business longer-term and allocate our capital to grow and create value in the right areas,” Ford Motor Company's president and CEO Jim Farley said in a statement.
Despite investing significantly in India, Ford has accumulated more than USD 2 billion of operating losses over the past ten years and demand for new vehicles has been much weaker than forecast, he noted.
The automaker said that it would focus on growing its Ford Business Solutions capabilities and team in the country, as well as engineering and engine manufacturing for export. With more than 11,000 team members currently in India, Ford Business Solutions plans to expand to provide more opportunities for software developers, data scientists, R&D engineers, and finance and accounting professionals, in support of the Ford+ plan to transform and modernise Ford globally.
Ford plans to import models like Mustang coupe and other electrified models such as the electric SUV Mach-E in the future while sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold.
The company said it will maintain parts depots in Delhi, Chennai, Mumbai, Sanand and Kolkata and will work closely with its dealer network to restructure and help facilitate their transition from sales and service to parts and service support.
It will continue full customer support operations for these vehicles with service, parts and warranty coverage, the company added.
The automaker said it will maintain a smaller network of suppliers to support engine manufacturing for exports and will work closely with other suppliers to ensure a smooth wind-down of vehicle manufacturing.
However, the company will continue to rely on India-based suppliers for parts for its global products, and suppliers and vendors supporting Ford Business Solutions will continue to support the business as normal.