The picture shows a Mercedes-Benz parked in a garage in Nanmeng.
Ford India Motor Company announced on September 9 that it will close two manufacturing plants in India in the near future. Ford's Sanand automobile export manufacturing plant in Gujarat, western India, will be closed in the fourth quarter of this year; Ford's automobile and engine manufacturing plant in Chennai, a coastal city in southern India, will be closed before the end of the second quarter of next year. As a result, about 4,000 employees in India will be unemployed.
The picture shows a luxury car parked in a residential area in Nanmeng.
Ford Motor Company said in a statement that the two factories have accumulated losses of $2 billion in the past 65,438+00 years.
It is very difficult for Ford to make this decision. Before deciding to close down, Ford struggled and tried various ways to break through, including partnership, platform enjoyment, contract manufacturing with other OEMs and the possibility of selling its manufacturing plants, but these did not achieve the expected results in the end. Previously, Ford had planned to establish a joint venture with Mahindra, a local Indian automaker, but this plan was also stranded due to the epidemic.
Japanese cars that are absolutely leading in the Indian market.
After many failed efforts, it became a difficult but rational choice for Ford to survive with a broken arm. "As part of our Ford+program, we are taking difficult but necessary actions. In order to achieve sustainable profitability, Ford will invest its limited capital in positive growth areas and create new value. Although we have invested heavily in India, Ford has accumulated losses of more than $2 billion. " Jim Farley, CEO of Ford Motor Company, said.
The picture shows a high-end car parked in a residential area in Nanmeng.
The lack of profit model and severely lower-than-expected market demand have become the main reasons for Ford to close its business. "Although we have made a lot of efforts, we have still failed to find a sustainable long-term profit path. Years of accumulated losses and continued overcapacity in the industry have further strengthened this decision. " Anurag Mehrotra, President and Managing Director of Ford India, said.
The picture shows the MG cars invested and produced by China enterprises in India.
For Ford's withdrawal, the Indian government said that this does not reflect India's current economic situation. Even though India's economic growth rate has declined in recent years, its average growth rate is still in the forefront of large economies.
199 1 year, India implemented economic liberalization reform and actively welcomed investors in the world market. Car companies, including Ford and General Motors, believe that with the continuous improvement of India's economic growth, the number of Indian middle class will rise sharply, and the demand for mid-to high-end cars and multi-purpose off-road vehicles in the Indian market will rise simultaneously, and India will become another explosion point in the automobile market. On the basis of this logical deduction, Ford 1995 officially entered the Indian market, and Ford's "Indian Dream" officially began.
But the development of the Indian market was only Ford's imagination, and all this did not happen as scheduled. With the sustained economic growth, India's middle class is indeed expanding, but this does not mean that this potential consumer group will definitely turn to the higher-end automobile market. This is related to the characteristics of the Indian middle class. In India, the middle class is a very broad concept, and the division between them is very serious. Those consumers in the upper middle class have the ability and willingness to consume high-end cars, but Ford is usually not considered. They prefer traditional high-end imported cars such as BMW, Mercedes-Benz and Audi. In the middle and lower classes of the middle class, these consumers' choices are more economical. The car is just a means of transportation, and they will not "spend a lot of money" for it. The reason is simple because I can't afford it.
For ordinary middle-class families in India with an annual income of 400,000-500,000 rupees, buying a Ford is undoubtedly risky. Ford's classic car, Ford EcoSport, sells for 820,000 rupees in the Indian market, which is about twice the annual income. Ford Figo, which sells at a lower price in India, is also close to 600,000 rupees.
The picture shows two Mercedes-Benz cars parked in a residential area in Nanmeng.
Too high and too low, so Ford is in an awkward position in the Indian market. The Indian auto market is dominated by affordable Suzuki India and Hyundai Korea, with a market share of about 60%, while Ford's share is less than 2%.
Another American product is in a similar situation to Ford in the Indian market, that is, Apple mobile phone. Although high-end people in India prefer Apple phones, among the ordinary middle class in India, South Korea's Samsung and China's Xiaomi, VIVO and OPPO are more desirable models.
The Indian auto market was once recognized as the third largest auto market in the world, second only to the United States and China, and its sales volume will reach 5 million in 2020. But the reality is that India's current annual sales volume is about 3 million, which is only a little more than half of the expected. Ford's "Indian Dream" based on the assumption of the Indian market was eventually turned into an "Indian nightmare" in the face of reality.
Indian local brand Tata Motors
Not only Ford, but also General Motors and Harley-Davidson, which had previously withdrawn from the Indian market, did not find a suitable entry point in the Indian market and did not develop products suitable for the needs of the Indian market. The lowest price of Harley-Davidson motorcycles in the Indian market is also close to 654.38+00,000 rupees, which exceeds the market price of ordinary cars. For Indians with lower incomes, this price is a bit far behind.
The manager of Ford India Company told the fact that investing in India needs to achieve sustained profitability in the Indian market. For many companies that are optimistic about the Indian market, this is a lesson to prepare before investing.
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