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Why did Ford decided to stop production in India?

Ford, America's largest automobile manufacturer, has decided to discontinue its commercial production in India. Ford presently has two plants in India, one at Marimalai in Southern India and the other at Sanand in Gujarat. Now, Ford has decided to shut down two of its plants after Q2 of 2022 FY. However, Ford said in a statement that it would continue to manufacture car engines for export. Ford is another major automaker that has been leaving India in recent times. General Motors ceased operations in India in 2017. Harley-Davidson, the world's largest motorcycle company, not only stopped making vehicles in India last year but also slashed sales significantly.


The decision will impact over 4000 employees, a media house quoted. Ford's decision is a huge setback to the BJP government’s current economic and industrial policies. This is a reversal to Prime Minister Narendra Modi's efforts to see foreign companies carry out manufacturing operations in India. The Ford Company has incurred losses of over $ 200 billion in India over the past decade. Moreover, the company said demand for new vehicles has fallen sharply. Ford, which sells five types of cars in India, has announced that it will continue to provide vehicle maintenance services and spare parts to its customers. The company, which has been manufacturing cars in India for the past 25 years, has struggled to cope with the competition.

The company did not even gain 2 per cent share in the Indian passenger vehicle market. Ford's position as the largest carmaker in the country has dropped to nine. With the announcement of the decision, the Ford-Mahindra joint venture being officially over, the former seemed to be going through a tough phase. No new models of Ford cars have been launched for quite some time in India. As per the survey, Ford is very comfortable for journeys along with safety but the company has frequently increased its price for every 6 months with this new customers looking towards Maruti, TATA, Hyundai and KIA. In the Indian market, it is always a safe bet for low-expensive cars. 

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