New Delhi, India Ford Motor Company announced on Thursday that it will close its two manufacturing plants in India, in Chennai (Tamil Nadu) and Sanand (Gujarat).
“Ford Restructures India Operations: To Cease Vehicle Manufacturing in Chennai & Sanand; To Progressively Wind-Down Vehicle Manufacturing for Export at Sanand Plant by Q4 2021 & Chennai Engine/Vehicle Assembly Plants by Q2, 2022; To Continue Engine Manufacturing for Export,” Ford tweeted.
Employees and dealers have been left in the lurch as a result of the company’s decision. The company’s restructuring is expected to affect approximately 4,000 Ford employees, as well as another 40,000 dealership employees.
Although the US-based car company has responded to users by stating that it is not leaving the country, there is no clear direction as to how the company will compensate its employees and dealerships.
“Ford is NOT leaving India. The changes we have announced today are designed to create a new, asset-light business model, which is sustainably profitable in the longer term,” Ford responding to several users on Twitter wrote.
Ford Restructures India Operations: To cease vehicle manufacturing in Chennai & Sanand; Progressively wind-down manufacturing of vehicles for export at Sanand plant by Q4 2021 & Chennai engine/vehicle assembly plants by Q2, 2022; To continue engine manufacturing for export. pic.twitter.com/E1PXmW7Rgq
— Ford India (@FordIndia) September 9, 2021
As part of a restructuring effort, Ford will only sell imported vehicles in the country. In the future, it will only sell imported vehicles in the country, such as the Mustang.
“The restructuring is expected to affect approximately 4,000 employees. Ford will collaborate closely with employees, unions, suppliers, dealers, the government, and other stakeholders in Chennai and Sanand to develop a fair and balanced plan to mitigate the consequences of the decision “According to Ford India.
Meanwhile, the Federation of Automobile Dealers Associations (FADA) stated that the auto retail industry is “shocked” by Ford India’s announcement.
“While attempting to alleviate dealer anxiety, Ford India President and MD Anurag Mehrotra personally called me and assured me that they will adequately compensate dealers who continue to provide vehicle service to customers,” said Vinkesh Gulati, President of FADA.
“FADA has been requesting that the Government of India roll out the Franchisee Protection Act because Auto Dealers are not adequately compensated like their counterparts in Mexico, Brazil, Russia, China, Indonesia, Malaysia, Japan, Italy, Australia, Sweden, and many other countries where this law exists,” Gulati said.
Ford India is the fifth largest exit from Indian markets since 2017, following General Motors, Man Trucks, Harley Davidson, and UM Lohia, in addition to numerous fly-by-night EV players that have already left a market that once promised exponential growth.