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Old 12th January 2021, 07:08   #1
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Default After more than a century, Ford ends production in Brazil!

Ford to cease manufacturing in Brazil after more than a century.

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The US carmaker has been producing vehicles in Brazil for more than a century but its operations there have been a cash drain since the country’s economic downturn in 2013.
This is part of the long-term $11 billion restructuring plan that began with former CEO Jim Hackett.

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Ford Motor Co. will stop manufacturing in Brazil in 2021 as part of a restructuring plan meant to cut costs and increase efficiency, the company announced Monday afternoon.

The company is closing two plants immediately and a third later in the year, affecting about 5,000 workers
Quote:
Ford has lost hundreds of millions of dollars in the region. Vehicles sold in Brazil will continue to come from Argentina, Uruguay and other markets
Ford said it would end sales of EcoSport, Ka and T4 once inventories are sold.

Ford CEO Jim Farley:
Quote:
With more than a century in South America and Brazil, we know these are very difficult, but necessary, actions to create a healthy and sustainable business

Ford will maintain its full customer support operations with sales, service, aftermarket parts and warranty support in Brazil and South America.

Ford's Journey so far in restructuring:

In North America, the company has stopped making cars, with the exception of the Mustang, in favour of more profitable pick-ups and sport utility vehicles. In Europe last year it cut 12,000 jobs. And less than two weeks ago, it axed plans for a joint venture with Mahindra, in a rethink of its capex priorities.

What Next?


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Last edited by volkman10 : 12th January 2021 at 07:21.
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Old 12th January 2021, 08:06   #2
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Default Re: After more than a century, Ford ends production in Brazil!

Trimming the fat, cutting the bloat and only focussing on profitable cars + segments + markets. In a way, I agree with Ford's HQ. What is the point of having presence in so many countries, with either minuscule market-share or loss-making operations?! India included, mind you.

Better to do a few things really well, than a lot of things in a mediocre manner.

That said, I don't agree with them abandoning small cars & sedans. That will come back to bite Ford.
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Old 12th January 2021, 08:33   #3
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by GTO View Post
I don't agree with them abandoning small cars & sedans. That will come back to bite Ford.
Completely agree! Quitting small cars and sedans space, especially in their home market doesn’t sound like a great decision; perfectly understand if they do that in India. And in markets like UK, the Fiesta, Focus etc. still have a huge pull.

That said, I like what they are doing with their sub-brands – Mustang, Bronco etc.
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Old 12th January 2021, 08:51   #4
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by GTO View Post
What is the point of having presence in so many countries, with either minuscule market-share or loss-making operations?! India included, mind you.
With such heavy investments over the years, Ford India I feel would stay put and let this dark clouds pass. After all it won't be easy to pack bags from one of the largest markets in the world. It's a tin can market though, one of the reasons why global behemoths like Ford, GM, VW etc struggles to hit a double digit market share after being here for a considerable period of time. And where would they pack the bags to if they can't exist here.

With Ford, it's a case of India(read enthusiasts) wanting Ford than the other way around. Else an Indian buyer who goes through the upgrade ladder would never know what it feels like to drive a Ford and what it takes to make cars with brilliant suspension, handling and tough build. They'll all end up with one or the other tin can all their lives. That's why it hurts me when manufacturers like FCA, Ford, VW etc struggle to stay afloat. Now VW group is the only hope. It won't be too long one can only have CBU/CKD's of these car makers.

Last edited by Bibendum90949 : 12th January 2021 at 09:09.
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Old 12th January 2021, 09:36   #5
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by GTO View Post
Trimming the fat, cutting the bloat and only focussing on profitable cars + segments + markets. In a way, I agree with Ford's HQ. What is the point of having presence in so many countries, with either minuscule market-share or loss-making operations?! India included, mind you.

Better to do a few things really well, than a lot of things in a mediocre manner.

That said, I don't agree with them abandoning small cars & sedans. That will come back to bite Ford.
+1. Jim Farley is a car guy at heart and smart. He's taking really hard and quick decisions already. He has to undo the damages done by Jim H.

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Originally Posted by Bibendum90949 View Post
With such heavy investments over the years, Ford India I feel would stay put and let this dark clouds pass. After all it won't be easy to pack bags from one of the largest markets in the world.
You may want to check how many cars Ford Brazil sold compared to Ford India. Here's the data for FY2019.
After more than a century, Ford ends production in Brazil!-capture1.jpg

Source: https://www.statista.com/statistics/...ing-countries/


Ford Brazil has,
  1. 100-year history.
  2. More sales than Ford India.
  3. LHD market.
  4. Proximity to the USA.
Yet Ford chose to stop production. Of course, Ford can import vehicles from other countries and sell them in Brazil. That's not going to be possible for volumes in India. I have a feeling that Ford India will shut shop or move to CKD (from Thailand) and CBU mode in India and be a niche premium SUV seller.
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Old 12th January 2021, 10:31   #6
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Default Re: After more than a century, Ford ends production in Brazil!

Ecosport and partially the Endeavor are the only thing that's still holding the ford brand for now and possibly even 2021, after that it's anyone's guess as to what they'll do. If they do introduce the next gen ecosport and come up with an SUV between 15-20 lakhs, then I'd guess they might survive this downturn. Also trim the fat (I.E figo/aspire) which aren't selling well. Some CKD/CBU cars from global portfolio to build the brand will not hurt as well (read bronco, mustang EV, F150)
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Old 12th January 2021, 20:27   #7
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by Bibendum90949 View Post
an Indian buyer who goes through the upgrade ladder would never know what it feels like to drive a Ford and what it takes to make cars with brilliant suspension, handling and tough build. They'll all end up with one or the other tin can all their lives. That's why it hurts me when manufacturers like FCA, Ford, VW etc struggle to stay afloat. Now VW group is the only hope.
Absolutely, could not agree more than this.

Maruti drove the market in to Tin cans with the aid of govt with notorious taxes. Honda and Toyota seems does not want to compete. True players like Ford, VW with robust build and excellent dynamics could not sustain the game. Hyundai is sustaining with gizmos and features. Only hope is TATA with a brilliant package and sustained quality
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Old 12th January 2021, 20:55   #8
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Default Re: After more than a century, Ford ends production in Brazil!

To be fair, Ford has options in Brazil. Ford still has factories in Mexico and the US from where they can serve the Brazilian market. However, such options do not exist in India, so either they produce cars in India or leave India (which they are not ready to do right now). I'm guessing the upcoming lot of Mahindra-based cars will be the final nail in the coffin if they fail. That said, Ford just stopped trying in India after the Ecosport, they should've launched more crossovers instead of depending on the Figo.

Also, keep in mind that the Brazilian economy is in a much worse condition in comparison to the Indian economy (yes, despite the GDP crash in India) as the Brazilian economy which was already in recession before COVID may not see growth for the next few years. Sad state of affairs in Latin America's largest economy.
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Old 12th January 2021, 21:54   #9
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Default Re: After more than a century, Ford ends production in Brazil!

Ford will only stop production in Brazil but they will not exit the market. Although they've withdrawn EcoSport from Brazil. If they are to follow the same path in India and import cars in CKD route I believe they'll lose the cost advantage here.

Recently they've also reduced prices of some varients of EcoSport. After the launch of new Fortuner, Endeavour is the cheaper option in that segment. So I think Ford is in a good position right now and all they need is a Xuv5oo derived suv in that price bracket. I think the kind of success Ford has got in India with Figo and EcoSport being the only two mass market models in their portfolio is commendable and a company cannot expect more from a portfolio like they have. Maruti sells two lakh cars per month but see how many models and varients they offer. You can't expect to gain 5-10% share in a competitive market with only two and a half cars, half being Endeavour at 40lakh bracket. If companies like VW and Ford want to gain more share they've got to bring more models like Fiesta, VW UP etc. VW is trying to get some new models this year and Ford has got to do it or else they'll remain a fringe player like they always have been If they don't decide to leave.
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Old 13th January 2021, 00:42   #10
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Default Re: After more than a century, Ford ends production in Brazil!

Quote:
Originally Posted by GTO View Post
Trimming the fat, cutting the bloat and only focussing on profitable cars + segments + markets. In a way, I agree with Ford's HQ. What is the point of having presence in so many countries, with either minuscule market-share or loss-making operations?! India included, mind you.
Sir, does that mean there are possibilities and we can expect Ford to be out of India too in some time to come?

Last edited by benbsb29 : 13th January 2021 at 05:07. Reason: Fixed broken quote tag.
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Old 13th January 2021, 09:25   #11
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Default Re: After more than a century, Ford ends production in Brazil!

I think Ford boss chose India over Brazil in last minute decision.
Hence we are seeing abrupt end of Ford-Mahindra JV, followed by this exit.
So I believe that they will now be diverting the capital to our country.

Hope our market responds fairly to their efforts.
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Old 13th January 2021, 09:53   #12
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by DriveOnceMore View Post
I think Ford boss chose India over Brazil in last minute decision.
Hence we are seeing abrupt end of Ford-Mahindra JV, followed by this exit.
So I believe that they will now be diverting the capital to our country.

Hope our market responds fairly to their efforts.
I think this makes sense by observing the current behavior of Ford in India.
Ford India must bring some competent models, relying solely on Ecosport is not a good idea. Ford India has already reaped benefits from Ecosport as a first mover advantage in the segment (Launched in 2013 and sold well till 2016, and then the competition becomes stiffer and stiffer with so many options now (Brezza, Venue, Sonet)
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Old 13th January 2021, 10:09   #13
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by DriveOnceMore View Post
I think Ford boss chose India over Brazil in last minute decision.
Hence we are seeing abrupt end of Ford-Mahindra JV, followed by this exit.
So I believe that they will now be diverting the capital to our country.
Thing is if you see this news along with the rumours of Ford introducing the Focus and the Ranger in India - mostly CBU products with higher margins - then it seems to indicate a scenario similar to the one in Brazil. Hope whatever their final plans are they announce them soon.
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Old 13th January 2021, 11:08   #14
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by da_lowrider View Post
Thing is if you see this news along with the rumours of Ford introducing the Focus and the Ranger in India - mostly CBU products with higher margins - then it seems to indicate a scenario similar to the one in Brazil. Hope whatever their final plans are they announce them soon.
Could be true. Ford might be thinking that India is one of the markets where they can sell ICE powered cars for a decade more compared to Brazil. Ford doesn't have a strong electric car portfolio as far as I know, so they are going to face challenges in all developed markets.
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Old 13th January 2021, 11:18   #15
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Default Re: After more than a century, Ford ends production in Brazil!

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Originally Posted by kiku007 View Post
+1. Jim Farley is a car guy at heart and smart. He's taking really hard and quick decisions already. He has to undo the damages done by Jim H.

Ford Brazil has,
  1. 100-year history.
  2. More sales than Ford India.
  3. LHD market.
  4. Proximity to the USA.
Yet Ford chose to stop production. Of course, Ford can import vehicles from other countries and sell them in Brazil. That's not going to be possible for volumes in India. I have a feeling that Ford India will shut shop or move to CKD (from Thailand) and CBU mode in India and be a niche premium SUV seller.
I guess the difference in geographic continuity of countries in South America combined with the relatively liberal tax regimes allows for import from nearby markets. But I agree, Ford may choose to become a niche player without manufacturing operations in countries like India and rely on CKD, CBU routes. In a way that makes sense also. Enthusiasts won't mind paying for Fords. CKD / CBU will ensure top quality. And they sure won't be as bad as the Germans to maintain. I wonder if it will only be trucks / SUVs, unless you're calling the Eco-sport an suv.
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