Companies

After break-up with Mahindra, Ford looking for a new partner in India

S Ronendra Singh New Delhi | Updated on July 13, 2021

Eyes contract manufacturing for Citroen

American automobile giant Ford Motor Company is looking for a new partner in India after its joint venture with Mahindra & Mahindra ended earlier this year.

According to sources close to the development, the company is also looking at partnerships for contract manufacturing at one of its factories in the country and is in talks with various players, including Citroen India. Citroën India makes the C5 Aircross SUV at its plant in Thiruvallur, Tamil Nadu.

“Ford was in talks with MG Motor earlier, but that fell through, and now it is in talks with Citroen India for contract manufacturing,” a source privy to the development told BusinessLine.

When contacted. both Ford and Citroen India declined to comment. Ford Motor, through its subsidiary Ford India, manufactures and assembles engines in two factories, one in Chennai and the other in Sanand (Gujarat).

Ford and Mahindra to end collaboration on all projects in India

Two plants

Spread over 350 acres, the Chennai plant has an annual production capacity of two-lakh vehicles and 3.40 lakh engines. Ford’s SUVs, EcoSport and Endeavour, roll out of this plant, in which the company has invested more than $1 billion.

The company has spent over $1 billion on the Sanand factory, which is spread over 460 acres. This factory has an annual installed production capacity of 2.40 lakh vehicles and 2.70 lakh engines. This plant makes the compact sedan Aspire and the hatchback Next-Gen Figo.

However, with the kind of domestic sales Ford has been reporting, the plants are not utilised fully, even after making vehicles for exports to 37 countries.

According to the latest data from the Federation of Automobile Dealers Associations (FADA), Ford India reported retail sales of 2,790 units in June compared to 2,872 units in the corresponding month last year. In May, the company had retailed 1,671 units and in April 4,214 units.

Dwindling market share

The sales of the flagship EcoSport have been slipping, and with the other brands not contributing much, Ford’s market share has dwindled to around two per cent from more than three per cent earlier.

The partnership with Mahindra was to lead to new products that would have shored up Ford’s market share in India. But that did not go very far, with the companies ending their joint venture within three years of entering it, in October 2019.

According to analysts, Ford India needs to get partners for contract manufacturing, with no further investments coming to its India operations in the near future.

Published on July 12, 2021

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