Ford to shut manufacturing plants in India and suffer $2 billion hit

The US carmaker entered India 25 years ago but still has less than 2 per cent of the passenger vehicle market having struggled for years to win over Indian consumers and turn a profit

NEW DELHI

Ford Motor Co will stop making cars in India and take a hit of about $2 billion because it does not see a path to profitability in the country, becoming the latest automaker to leave the major growth market dominated by Asian rivals.

The US carmaker entered India 25 years ago but still has less than 2 per cent of the passenger vehicle market having struggled for years to win over Indian consumers and turn a profit.

Ford said in a statement on Thursday that it had accumulated operating losses of more than $2 billion in 10 years in India and demand for its new vehicles had been weak.

“Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability,” Ford India head Anurag Mehrotra said in the statement.

Ford’s decision to cut its losses in India after leaving Brazil earlier this year underscores the pressures on global automakers to invest more in electric and automated vehicles, as well as connected vehicle technology.

Global automakers once fought to maintain a presence in every major market and were willing to lose money to do so.