Ford Is Officially Leaving India After Accumulating $2 Billion In Losses Over 10 Years
Ford has called it quits in India.
The automaker is expected to stop making cars in the densely populated country and take a $2 billion charge due to its inability to see a “path to profitability” manufacturing there, according to Reuters.
Ford first entered the Indian market 25 years ago but still only has less than 2% of its market. On Thursday of this week, the company said it had accumulated operating losses of more than $2 billion in the 10 years it had been in the country.
Ford and India’s Mahindra & Mahindra failed it put into place a JV that would have allowed Ford to make vehicles at a lower cost.
As a result, Ford’s India head Anurag Mehrotra commented: “Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability.”
Mehrotra also blamed “persistent industry over capacity and lack of expected growth in India’s car market”.
Ford also left Brazil earlier in 2021, exemplifying how tough the global market can be for the capital intensive business of automobile manufacturing. Automakers used to make an effort to get a foothold in all geographical areas, despite sometimes not turning a profit. Now, the belt has tightened on automakers, who have instead prioritized profitability.
Other manufacturers like GM and Stellantis have moved out of money-losing countries and have redeployed the capital they would have burned to EV projects and technology like autonomous driving.
India was previously expected to be the world’s third largest car market by 2020. But instead of meeting estimates of 5 million sales per year, the country has lagged with just 3 million sales per year.
No profitability, you say? We’re sure Tesla will step in with plans for a new Gigafactory any day now…
Fri, 09/10/2021 – 15:25