In July, Ford India launched the Figo automatic and, according to spy photos, the facelifted EcoSport is on its way. It appears that Ford India is going about its business as usual. Due to a lack of new models, the American brand is facing its biggest crisis in India in its 25-year history. The company’s woes have been exacerbated by a significant drop in bread-and-butter export volumes, as well as COVID-19-related disruptions.

Only 80,000 cars are produced each year (half of which are exported), which is just 20% of the 4,00,000 cars produced in the past. In Sanand and Maraimalai Nagar, Ford’s plants are set up to produce a large number of vehicles every year. So little capacity is being used that Ford India is desperately trying to find another manufacturer to share capacity with, either through contract manufacturing or a joint venture (JV) or even the sale of one of its plants.

M&M’s abrupt termination of what could have been a strong partnership left Ford India in the lurch.

First exploring synergies in 2017, they went a step further in October of this year, formally shaking hands to begin work on a JV that would eventually lead to a full partnership. Everything from combining manufacturing facilities with EV technologies to developing multiple platforms and engines for an entirely different lineup of Mahindra and Ford products was on the table. Both companies would benefit from scale and products that would have been impossible to develop independently. Worst case scenario; Details of the breakup are kept under wraps by both companies. But M&M’s new leadership seems to have changed the company’s mind. However, Ford (and even some Mahindra insiders who worked closely on this deal) say that there was nothing so serious that it couldn’t be resolved.

A major flaw in Ford’s strategy was the lack of a backup plan. Its short to mid-term product plan was destroyed when the alliance broke up on December 31, 2020. In the first phase, Ford and Mahindra planned to jointly develop seven new models, including a sub-four-metre compact SUV (B744), and a Creta fighter (B772) on Ford’s platform. The second phase would see Mahindra develop the CX757, which is a C-SUV or 4.5m-long SUV on Mahindra’s W601 platform, which is the basis for the XUV700.

Ford had already outsourced the design and styling of the C-SUV to Pininfarina for a possible mid-2022 launch. After that, Ford-based SUVs would be released in the second half of 2022 and early 2023, with Mahindra engines powering them. M&M’s mStallion 1.2 turbo-petrol engine was already in Ford’s plans for the facelifted EcoSport, whose April 2021 launch date has been postponed.

Ford India stuck in a rut

With this affair, Ford India wasted three years that it could have used to develop its own products. This is too late even if Ford wants to invest in India. Blue Oval-wearing mass-market models won’t be available for at least three years. More concerning is the fact that Ford’s current lineup won’t last that long. In order to comply with CAFE, BS6 Stage II, and other regulations, some models, particularly the 1.5 diesels, will need to be upgraded, which will require additional investment. In fact, even the next-generation Endeavour (U704) was pushed back, and India was the last country in Asia to receive the new SUV. Because Ford had planned to introduce the Endeavour after the C-SUV, this is why it was delayed.

Due to Mahindra’s lack of commitment, Ford’s best bet is to partner with another manufacturer. A collaboration or joint venture is the only viable option left. While it’s believed that Ford has approached a number of manufacturers about forming an alliance, Skoda, MG, and Tata Motors are the only companies that could potentially be of assistance to the company. There’s a good chance that Ford and VW will expand their global alliance to include other markets like India. For some reason, it appears that Ford tried to explore partnering with VW’s Indian distributor (Skoda India), but was turned off by its costs.

According to a Ford source, “Mahindra taught us how to keep a close eye on development costs.” Also, Tata Motors can stretch every development rupee, but would they be a worthy partner? Tata, on the other hand, ended its proposed partnership with Volkswagen in a similarly abrupt manner. Tata Motors, on the other hand, desperately needs a midsize SUV to bridge the gap between the Nexon and the Harrier, and Ford has it. That could be the B772 from Ford. With sales of 30,000 a month, Tata Motors could be in need of capacity in the near future. As well as MG India, which will require more capacity in the near future. According to reports, Tata Motors has not shown any interest.

Even though Ford may have spoken with Ola and offered its Chennai plant to the electric mobility start-up, Ola isn’t in immediate need of capacity, as a massive new plant will soon be built near Bengaluru.

Ford production plant: Will it survive?

If Ford fails to find a partner, it may be forced to shut down its manufacturing operations in India. In the end, Ford will have to shut down the Sanand plant because it is too expensive to produce cars profitably.

Maraimalai Nagar, where Ford’s EcoSport and Endeavour are built, was hoped to remain open at least for the time being. Our current model line-up can’t support these plants for another three years, which brings us back to the core issue at hand.

In 1994, Ford was one of the first multinationals to rush into India, and you’d expect it to give the market one last shot. Mahindra was the target of the last shot, and it appears that patience with India has run out in Dearborn, Michigan. Investing in India for Ford means throwing good money after bad. According to a Ford source, “Ford would rather invest 500 million dollars in a new pickup truck or another market that yields better returns.” Aside from that, the frequent and sudden policy changes make doing business here difficult and annoying. When it comes to low-volume models like the Mustang, dealing with regulations like ISI and BIS marks on windscreens and alloys can be an absolute pain, according to the designer.

Ford, on the other hand, will remain in India even if both plants close, unlike General Motors, which pulled the plug on Chevrolet when it left India. Following in the footsteps of Ford Australia and Brazil (where it stopped local manufacturing), Ford India will reduce its footprint in the market by relying on imports. A small number of vehicles such as the Mustang, the Ranger (for which a launch date has been set) and future EVs could be sold here.

Ford could be forced to sell only niche cars in India, a market known for bringing down giants. Finally, we’ll be able to drive American Fords!

Also, read: All-new Ford Ecosport facelift