The recent hike in both fuel prices and interest rates have had a very negative impact on the world’s most promising car market. Taking precautionary actions, Ford India is planning to adjust production as it looks to manage its inventory. The American automaker has seen a drastic reduction in demand for petrol vehicles and is looking at exports to reduce the effect of the same. The company has been facing supply constraints for diesel components from its suppliers. Thus, diesel-powered Ford vehicles are having a waiting period of 2.5 months. Sales of diesel vehicles account for 75% of the company’s volume every month.
“Powertrain suppliers have not kept up because the swing triggered by the change in the product mix has been dramatic and sudden. Right now we’re looking at adjustments of production mix between diesel and petrol vehicles. We need to adjust our production to the new demand scenario. If due to further hikes in interest rates or fuel price the demand falls significantly, we will adjust our overall production accordingly,” Michael Boneham, MD, Ford India, said.
