A Ford-Citroen deal would help the American firm better utilise its Indian factories
Ford India is holding talks with Citroen over a contract manufacturing deal, months after its joint venture with Mahindra & Mahindra dissolved.
On 1st January 2021, both Ford and Mahindra announced that their joint venture, which was announced in October 2021, will be coming to an abrupt end.
Since then, the American automobile giant has been on the lookout for a new partner in India. It was also looking at partnerships for contract manufacturing at 1 of its underutilised factories.
The company has entered talks with various firms, including Citroen India, said people in the know, who added that MG Motor India and Ford discussed about the possibility of contract manufacturing, but the talks fell through.
In India, Ford has 2 manufacturing facilities, 1 at Chennai, Tamilnadu (where it makes SUVs) and the other at Sanand, Gujarat (where the Figo and Aspire are made). The company can make 4.40 lakh vehicles and 6.10 lakh engines every year.
But, since Ford’s sales are low (it sold less than 5000 units in June) the factories are yet to be fully utilised. This is despite the fact that the firm manufactures vehicles for exports to 37 countries.
According to analysts, since no further investments are coming to Ford India for operations, it needs to get a partner for contract manufacturing.
However, Citroen India also has a manufacturing site at Tiruvallur (Tamil Nadu), where it assembles the C5 Aircross. Thus, if the Ford Citroen deal for contract manufacturing gets approved, it might be that the French brand’s upcoming C3 Sporty would be made by the American firm.