5 BIG Reasons I Think Ford Won’t Return to India

I have heard rumours that Ford will come back to India so many times in recent times that I decided to do some research. As per my findings, I don’t think there is any specific scenario in which it makes sense for Ford to re-enter our market. Remember, Ford quit manufacturing cars in India back in September 2021. However, it continued its operations to produce engines and models for export for a while after that. In fact, it recently announced its revenues and profits which made a lot of people confused. Let us glance through the details of this conundrum.

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Why Ford Won’t Come Back to India

The ‘Leaked’ Patent Story

A lot of people are basing their assumptions on the report of the ‘leaked’ patent filed by Ford in August 2021. This is a month before it made the strategic decision to leave India. So, this patent is not fresh. Hence, that is not concrete evidence to support the claim of the American auto giant making a comeback in our market. There have been no new patents filed for any new or once-existent models in India. Still, it is surprising to witness so many digital automobile media houses going on about this patent which somehow indicates that Ford will launch new products in India.

Job Posting on LinkedIn

There are also job vacancies posted by Ford India on LinkedIn for the roles of Senior Engineer, ADAS Feature Owner, Manufacturing Digital Transformation Integration Architect Manager, etc. Now, this is not untrue. However, the is a subtle detail that everyone seems to be missing here. It’s been over 25-year-old journey for Ford Business Solutions (FBS) in Chennai. While the Ford plant was shut down in September 2021, its FBS celebrated 25 years of operations in November 2023. FBS delivers technology and business services that include software engineering, analytics, data sciences, artificial intelligence, machine learning, product engineering, accounting/financial analysis, digital marketing, enterprise connectivity, manufacturing engineering, planning and logistics and supply chain. to global locations.

So, even if Ford doesn’t launch any product in India, it can still hire more professionals for FBS. Speaking to media, Gangapriya Chakravarti, India Site Lead and Managing Director, Ford Motor Company, said at CII Connect., “Ford has closed down but I can tell you that our organisation is larger than the organisation that has closed down, growing faster than ever and growing in areas that are cutting edge,”

How Did It Generate Profit?

Around the festive season last year, Ford India shared details about its revenue and profit in our market. However, since its arrival in India back in 1995, and until 2021 when it quit manufacturing here, it incurred losses worth $2 billion (Rs 16,000 Crore). It was never profitable during its 25 years of selling cars. That was the main reason why it had to pull the plug on selling its products in the Indian market. However, around October 2023, it marked a profit of Rs 505 Crore in the Financial Year of 2023. But this came by exporting vehicles and producing engines in India. As I mentioned previously, it kept on producing vehicles for export even when it halted production for India. The same goes for engines. This doesn’t mean that it will return back to making cars in India, which was never profitable in the first place.

JSW Deal Fell Through

There is also the sentiment in the market around the fact that the reason why the JSW deal didn’t happen is because Ford will continue its operations through its manufacturing plant. I must mention here that Ford was in talks with many companies to sell its Chennai plant. Remember its Sanand Plant in Gujarat has already been bought by Tata Passenger Electric Mobility for Rs 725 Crore. But there were many discussions regarding the sale of its Chennai plant too. Ford tried striking a deal with Mahindra, Tata Motors, VinFast, Ola and Maruti Suzuki in the past. However, all these negotiations fell through. The latest firm in talks was JSW Group which recently acquired a significant share in MG Motors. But this discussion didn’t reach its logical conclusion either. Just like other cases, we have no reason about the details of why it is so. Therefore, even this aspect doesn’t prove that Ford will re-enter India.

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Chances of Revival are Bleak

Finally, as automobile enthusiasts and professionals, we know that in this industry, it is nigh impossible for a carmaker to re-enter any market. Once any company suffers large losses in a particular, it makes sure to try everything to survive. However, when it decides to call it quits, it is because the market has given the final verdict. Thereafter, a company mostly doesn’t venture into attempting a re-entry due to financial reasons. In fact, there have been many carmakers who quit India in the past including Chevrolet, Mitsubishi and Fiat. We have not heard any reports regarding either of these making a comeback. In the automobile industry, this rarely happens. Therefore, I am not fully convinced that it would happen in Ford’s case either. These are the 5 biggest reasons why I think Ford won’t come back to India. Still, let us keep an eye out for further developments in this context.