Business India

Ford: American car giant to shut down manufacturing plants in India

American car giant Ford will shut down manufacturing cars in India by the second quarter of 2022.

The company said it would shut down both its plants — one in Tamil Nadu and another in Prime Minister Narendra Modi’s home state of Gujarat.

Ford in a statement said it would continue to manufacture car engines for exports, continue to provide maintenance services, parts and warranty support to existing customers.

Ford has run up operating losses of more than $2 billion over the past decade in India and demand for new vehicles has ‘weakened’.

This isn’t the first firm to leave India in recent years. In 2017, General Motors (GM) stopped making cars for the Indian market.

And last year, Harley-Davidson stopped manufacturing and massively scaled back its sales operations.

These exits have been a blow to Indian Prime Minister Narendra Modi’s efforts to lure or retain foreign manufacturers.

According to automobile dealers’ body FADA, over 45,000 jobs are likely to be affected by Ford’s move. Dealers have invested over $280 million to set up their dealerships and other infrastructure.

Additional 4,000 people working in the manufacturing plants are expected to be directly affected.

Ford has been manufacturing cars in India for 25 years, but it has struggled to compete.

According to reports, it has a share of less than 2% of the passenger vehicles market and the firm is ranked ninth on the list of the country’s biggest car makers.