Earlier this week, reports emerged that Ford has been in talks with Citroen for offering contract manufacturing services. It was speculated that Citroen could produce the C3 Aircross, its upcoming Kia Sonet rival, in one of the two local production facilities of the American carmaker. Soon, thereafter, leading news dailies came up with reports that talks with Citroen have fallen thru and the carmaker could now be looking at shutting down its local operations. It was reported that the local subsidiary of the renowned auto manufacturer will be looking at shutting down its two facilities in India — Maraimalainagar in Tamil Nadu and Sanand in Gujarat. No sooner than the news of the carmaker wrapping up spread, several customers and fans started feeling uncertain about the future of lakhs of Ford India cars that have been sold in India in all these years.
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Responding to a Tweet by one of the followers, Ford India did reaffirm its dedication towards serving its Indian customers but clearly, there was no attempt to state if the carmaker is actually leaving our market. It also didn’t quash any reports on the carmaker’s exist. As for serving its local customers, the carmaker will be anyway bound to offer spare parts of all its existing vehicles for another 10 years, which should help the owners use their vehicles until the end of their lifecycles. In October 2019, the car manufacturer and Mahindra had decided to form a JV that would see the Indian carmaker acquiring a majority stake in the local subsidiary of Ford. The new entity would have been responsible for the development, marketing and distribution of Ford cars across the country. However, in January 2021, it came to light that the two carmakers had scrapped the agreement due to changed global economic conditions. With this, the two carmakers had to re-think the capital allocation and reassess the business scenarios in a market that was crippled by the pandemic.
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After dissolving the JV with Mahindra, Ford initiated talks of contract manufacturing with a number of manufacturers, including Citroen MG and Great Wall Motors. However, discussions with all these carmakers were quick to fall through. Currently, the company is said to be in talks with Ola for the contract manufacturing of the latter’s upcoming electric cars. However, so far, Ola has refused to comment on this. Unfortunately, at this stage. most Ford owners are left with a sense of uncertainty while some prospective Ford buyers have decided against buying a model from a carmaker whose future remains questionable at the moment.
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Going by the dwindling sales figures in the last few years, it now looks like the only way Ford India can continue to operate in the country is through a joint venture with some other carmaker. This way, the ailing auto manufacturer can benefit from some investments and make full use of its two production facilities. The JV with Mahindra could have actually helped Ford survive the tough market conditions but now, it looks like nothing is working in the company’s favour. We, at CarBlogIndia, really hope that Ford India emerges stronger from these tough times while Ford Motor Company finds it appropriate to make fresh investments into its Indian subsidiary.
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