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Investing.com – Ford Motor stock (NYSE:F) fell 2% Thursday on its decision to stop making cars in India, one of the largest and toughest markets in the world.
The decision will affect 4,000 employees, the company said. Many more are going to be affected as dealers shut showrooms and vendors are forced to look for other buyers of their products.
The decision comes after the company accumulated operating losses of more than $2 billion over the past 10 years and a $800 million non-operating write-down of assets in 2019.
The company, like its rival General Motors (NYSE:GM), couldn’t crack the Indian market where hatchbacks and fuel-efficient affordable cars made by Japanese and South Korean companies have so far ruled the roost. The market is slowly moving toward SUVs where the Koreans and Chinese dominate along with a couple of local companies.
Ford will continue to provide customers in India with ongoing parts, service, and warranty support. As part of the plan, Ford India will wind down vehicle assembly at Sanand in the western state of Gujarat by the fourth quarter of 2021 and vehicle and engine manufacturing at Chennai in Tamil Nadu by the second quarter of 2022.
It will now serve new customers with imported vehicles. It said it will continue to make engines for exports while keeping thousands at its R&D and engineering unit in Chennai employed.
