Ford Motor Co F.N will stop manufacturing cars in India and shut down factories there, two sources told Reuters, as the latest car manufacturer to leave the market which is still dominated by its Asian rivals.
The American automaker made the move because it was not profitable to continue, one source said, adding that the process is expected to take almost a year.
Ford is the latest car manufacturer to stop production in India, after US companies like General Motors GM.N and Harley Davidson HOG.N, which have already left the market that previously promised model growth.
Ford has strived to win over Indian buyers with money and gain profits in a market dominated mainly by low-cost cars manufactured by Suzuki Motor Corp 7269. T and Hyundai Motor 005380.KS.
The American car manufacturer will continue to sell some of its vehicles in India through the importation of fully built vehicles and dismantled units, the second person said, adding that it will also provide assistance to dealers to cater to existing customers.
Ford did not immediately respond to a request for comment. He had previously announced that he would decide on a capital allocation plan for India in the second half of 2021.
Ford will allocate capital according to its plan to generate a strong cash flow and achieve the EBIT-converted 8% (pre-interest and tax revenue), the company told Reuters.
The decision to suspend domestic production came after Ford ended its partnership with national manufacturer Mahindra & Mahindra MAHM.NS – a move that would end Ford’s many autonomous operations in India but make it possible to launch new cars faster, reduced costs and lower investment.
Ford entered India 25 years ago, but has less than 2% of the passenger car market in the second most populous country in the world.