Ford To Decide Investment Plans For India In H2 2021

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Ford will decide on the investment plans in the second half of this year for India as it aims to get back to profitability

In the light of the proposed partnership with Mahindra not falling into place, Ford will decide on its investment plans for India in the second half of this year as part of a revised strategy in one of the biggest car markets in the world. The Blue Oval only has the long-serving EcoSport compact SUV and Endeavour full-sized SUV as its popular models domestically.

Ford Motor has handed Senior Executive Steven Armstrong the duties involved in evaluating investment plans for India as he takes up the new role of Transformation Officer in South America and India. His appointment is believed to speed up the process over allocations as Ford continues to assess capital for India with an answer expected in H2 CY2021.

Armstrong, who headed Changan Ford JV in China, will report for duty on his new role from May 1 and Ford India’s head Anurag Mehrotra will report to him directly. Ford acknowledges the significance of the Indian market and it also acts as a source for global powertrains. Previously, Ford said it will allocate capital to generate consistent cash flow to achieve an 8 percent adjusted EBIT margin.

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Last week, Ford overcame Q1 profit estimated by Wall Street and told investors all the markets barring India were profitable. It has been reported that India is of the lower priority compared to some other markets and it will be interesting to see what will be done to size up profit margins as it is in the midst of global restructuring plans.

Ford has been in the business for two and a half decades in India but it could not garner high volume sales as the market share stands at under 2 percent. The proposed JV with Mahindra would have helped in expanding into new segments with lower production costs as at least three SUVs were said to be in the pipeline.

In the last financial year, Ford used only a fifth of its production capacity as low utilisation of its plants is another major issue faced by the company.