Ford Motor Company is said to be contemplating its plans of exiting India. The company is said to be interested in using India as a hub to make and export EVs to the international markets. The company isn’t also ruling out the possibility of once again selling cars in the domestic market as well.
The news came to the light after the car makers’ application to participate in the federal government’s Performance Linked Incentive (PLI) scheme got approved. This scheme aims at making India a hub for automobile manufacturing and offers incentives to the companies that set up their production units in the country.
Though just six months back the company had announced that it is exiting India as it did find the Indian market profitable and was ready to book almost $2billion in losses.
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The company, which has two plants in India, said that it is now “exploring the possibility of using a plant in India as an export base for EV manufacturing”. Both the Ford plants in the country - one in Sanand, Gujarat, and the other one in Chennai – have been producing ICE vehicles and would require significant upgrades in order to be able to start making electric vehicles.
The timing couldn't have been better
While the company doesn’t have concrete plans of resuming Indian operation for electric cars, it will be only practical for the company to start selling vehicles here once again. The company said, “There is no specific discussions on this right now, but it is not out of the realm of future consideration. Ford also plans to serve customers in India with must-have iconic vehicles, including the Mustang coupe.”
Ford has already announced that it is focusing on electric vehicles and has announced a massive budget of $30 billion globally to develop new fully-electric and new hybrid vehicles.
Considering the market dynamics, the Indian plant, post the re-tooling, could be used to make cheaper electric cars. This also augurs well for the Indian market as it needs more competition as well as affordable electric cars to help boost the adoption of zero-emission vehicles in the country.
That said, even after operating in India for over a couple of decades, Ford could only manage less than 2 per cent market share in the market. This means that the company will have to work from the grass root to ensure a wider reach and given the fact that the electric vehicle market is at a nascent stage right now, Ford could enjoy an early mover advantage as most established carmakers are still busy assessing the market.
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