Ford decides India’s investment plan in the second half of 2021


New Delhi-Ford Motor Company plans to strengthen India’s capital allocation plan in late 2021 as automakers review their strategies in the deficit market, senior executives emailed staff.

Dearborn, Michigan-based Ford has entrusted senior executive Stephen Armstrong to evaluate plans to invest in India in his new role as head of transformation in South America and India, automakers said this week. Said in another statement.

Diane Craig, president of Ford’s International Markets Group (IMG), said in an email to staff Wednesday that he had “a lot to do to continue to evaluate capital allocation in the market.”

“We expect to get an answer later this year, but Stephen’s appointment will help us focus on our efforts and speed up the process,” she said.

IMG includes India, where the company employs more than 16,000, and 100 other markets.

Anurag Merotra, head of Ford India, reported to Armstrong, who had previously led a joint venture with Changan Ford in China, and said he would take on his new role from May 1.

A Ford India spokesman confirmed that the company expects to reach a capital allocation decision later this year, making the country an important market and a global powertrain source for ranger SUVs. I said there is.

Ford previously stated that it would generate consistently strong cash flow and allocate capital consistent with its plan to achieve an 8% corporate adjusted EBIT (interest and pre-tax profit) margin.

Automakers surpassed Wall Street’s first-quarter profit estimates late Wednesday and told investors that all markets under IMG were profitable except India.

Jim Farley, CEO of Ford’s $ 11 billion global restructuring, wants to increase India’s profits, but says India has a lower priority than some other markets. Sources told Reuters earlier.

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Ford India Private Limited employees work at the company’s factory in Chengalpattu, India, on July 9, 2003. (Dibyangshu Sarkar / AFP via Getty Images)

Struggle

Ford is not the first Western automaker to struggle to win and profit from modest Indian buyers in a market dominated by Suzuki and Hyundai’s extensive lineup of primarily low-priced vehicles.

General Motors withdrew from the domestic market 20 years later in 2017, but Harley-Davidson packed it last year after a decade of unsuccessful efforts to build a foothold.

Ford entered India 25 years ago, but it is the second most populous country in the world with a passenger car market share of less than 2% and a lower car penetration rate than the United States and China.

The currently suspended partnership with domestic automakers Mahindra & Mahindra would have ended most of Ford’s independent operations in India, but faster, cheaper and with less investment in new cars. Made it possible to release it.

The two companies have planned to develop at least three new SUVs and share the powertrain.

Ford will now need to choose a car from its global portfolio to sell in India or develop a new one, sources said.

The joint venture would also have helped Ford tackle the low utilization of plants in the country. That remains one of the biggest problems, he added.

Two years ago, Ford used only about 60% of its total annual production capacity of 440,000 at its two Indian plants, but the pandemic reduced it to 20% last year.

Adity Shah

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