Ford India is planning to close its factory operations in the country, reveals an ET Auto report. The company has been in talks with several automakers regarding the sale of both the Chennai and Sanand manufacturing units. Ola was the latest company with which Ford was in touch over contract manufacturing and sale of its production facilities. Ola could utilize Ford's factories to build electric cars. If this happens at all, Ford will be the third American brand to exit the Indian market after Chevrolet and Harley-Davidson.
When reached for a comment over these recent developments, Ola's spokesperson refused to comment. On the other hand, Ford's official spokie termed it as mere speculation and said, "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.” Ford had earlier held talks with Mahindra regarding contract manufacturing for over two years. On condition of anonymity, a person close to the developments said, "talks were at an advanced level with Mahindra & Mahindra and it looking at cross badging and new product alliance plans with the Indian partner would take care of Ford India's 400000 units per annum capacity at Maraimalainagar and Sanand."
Though, quite surprisingly, talks with Mahindra fell through and Ford tried to reach out to several other automakers including MG Motors, Changan and Great Wall. The British automaker didn't show any interest while Changan and Great Wall expressed preliminary interest but later backed out due to geo-political tensions at the India-China border. The passenger vehicle market has seen significant reduction in volumes and hence most of the production units of almost every manufacturer in the country are under utilised. "The uncertainty in the long-term growth prospects of the auto industry has resulted in serious challenges for Ford, including capacity utilization," said another source.