Ford India pulled out of retail operations in September 2021 but a fresh report claims carmaker contemplating returning with EVs
Car enthusiasts and Ford owners across the country were left heartbroken as the American carmaker announced pulling out of the retail market last year. Now, however, Reuters reports that the Blue Oval is rethinking its decision and could make a re-entry. In line with this, the company would produce electric vehicles in India for export as well as local market.
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Ford made a strategic business shift back in September 2021 as it clocked losses of over USD 2 Billion with no profitability in Indian retail operations in sight. Back then, this decision was seen as a huge step in the wrong direction for PM Modi’s ‘Make in India’ initiatives. The American carmaker, which has two production plants in the country, is now “exploring the possibility of using a plant in India as an export base for EV manufacturing.” On being asked if the company would even sell these electric cars in the country, a spokesperson commented “there have been no specific discussions on this right now, but it is not out of the realm of future consideration”. This decision is in line with the company’s plan to pump in over USD 30 billion in EV and battery technology by 2030.
Back in the day, Ford India had a market share of less than 2 per cent at the time of stopping production and retail. It struggled for over 20 years to get profitable. Restarting production in the country for export markets should help the company with a foot-in-the-door approach to re-enter the car market as and when it deems fit. India offers a huge cost benefit to carmakers for manufacturing and the American carmaker has already had experience of producing cars in India and exporting them to North America and Europe.
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“Ford will have to prove India can also be cost-competitive for making EVs, for which it will need big investments to localise the supply chain,” said Gaurav Vangaal, Associate Director, Light Production Forecasting at IHS Markit. The latest comments from the carmaker emerge after it received an approval for a proposal to seek incentives under the government’s USD 3.5 billion for zero-emission vehicles. The fresh development can be viewed as a huge part of the government’s plan to reduce oil imports and air pollution by offering up to 18% benefits to new investments made by manufacturers to produce electric and hydrogen vehicles in the country. Ford is one of the 20 companies that have been approved by the government to receive benefits under its latest scheme.