Ford likely to shutdown Indian manufacturing plants, talks with Ola

Ford is looking at shutting down its Indian manufacturing operations for good and has been in talks with various car companies, including Ola to use the factories to build electric cars. However, Ford has termed talks with Ola as “speculative”.

“We would not like to comment on speculations. We continue to assess our capital allocations in India and expect to have an answer in the second half of this year,” a Ford India spokesperson said.

The American carmaker may take a call on its Maraimalainagar and Sanand factories later this year. In May, Ford had halted production at its Tamil Nadu plant for two days following a demand from a section of workers to suspend operations at the Maraimalai Nagar facility, near Chennai. Rising COVID-19 cases had been cited. In January this year, the Chennai plant was shut due to semiconductor shortage. The company spokesperson said this shortage will be impacting Ford operations in India and production across Chennai and Sanand plants.

A source told ToI that Ford went slow with their contract manufacturing discussions for two years because talks were at an advanced level with Mahindra & Mahindra and was looking at cross badging and new product alliance plans with the Indian partner would take care of Ford India’s 400,000 units per annum capacity at Maraimalainagar and Sanand. But talks fell through and Ford initiated the process all over again to identify partners including MG, Changan and Great Wall.

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Changan and Great Wall, though evinced preliminary interest, but dropped their India plans because of geo-political tensions at the Indo-China border. And the passenger vehicle market has dropped sharply, leaving manufacturing capacities underutilized, across manufacturers.

Another source said the uncertainty in the long-term growth prospects of the auto industry has resulted in serious challenges for Ford, including capacity utilization.