Ford finally took the fork in the road

In 25 years, the automaker never managed to take the pulse of the Indian consumer

small cars and compact SUVs.

However, Ford did not want to abandon the Indian market either. It tried very hard for a joint venture with Mahindra & Mahindra to maintain a presence in the country. That did not finally work out because the Mahindras did not think the capital allocation for this would be worthwhile.

Meanwhile, Ford is, like any other global automaker, facing chip shortages and that has forced it to idle even some of its plants in North America. It is even facing more logical. It made far more sense to concentrate its resources in the areas where the money was.

Equally though, successive governments have played their own role in making the Indian market skewed artificially in favour of small carmakers. The difference in taxation between sub-four metre vehicles and those that cross that length has played a huge role in this. Indian policymakers, for whatever reason, have not really thought of either consumers or manufacturers. The hottest selling

Much before Ford decided to walk away, General Motors had already quit. Toyota and Honda too have scaled down their efforts, with Toyota actually trying to ride on Maruti’s coattails in India with crossbadged products.

The worry for the government is of course that Ford’s exit will mean jobs lost and bad publicity at a time when the economy can hardly afford it. According to some reports, Ford’s exit will mean a loss of 4,0004,500 manufacturing jobs but that would be understating the problem. One needs to count the impact on dealerships which will now close down and ancillary manufacturers who supply Ford.

There is talk of investments coming in EVs that will make up for this but that is not a clear equation. First, the EV market will take time to mature and second, EVs are less manpower-intensive to manufacture than internal combustion engines. Also, until global investors see a stable policy, investments in EVs will be limited.

What should worry the Indian government is that like telecom, the auto industry flattered to deceive global investors. Policies ensured that both markets became virtual duopolies. And despite the fact that almost every global automaker had entered India both for the domestic market potential as well as a manufacturing base for exports, it failed to be either. Lack of FTAs and conditions on the ground ensured that India did not become an auto and auto ancillary manufacturing hub either.

And the likelihood of it becoming one even in the EV era seems bleak unless India figures out ways of attracting both battery makers and chip makers in the country. That should worry the government because the auto industry was one of the few success stories in the 1990s and 2000s for attracting investments and creating jobs.

The final round of the US Open Tennis tournament of 2021 was unique in two ways. The men’s final was a clash between the two top seeds; Djokovic and Medvedev. Ultimately, No. 2 prevailed, thereby smashing the dream of No. 1 to score a calendar year Grand Slam. In the women’s final, both finalists were unseeded qualifiers, as well as teenagers. In both categories, the winners were first-time claimants for the title.

Ref.: ‘Djokovic’s bid ends in tears’ (September 14). Great show by Daniil Medvedev. A straight set win against the World No. 1, aiming for a win in the US Open finals and a Grand Slam sweep is no easy task. Millions of fans and Djokovic himself were expecting the latter to prevail but his dream ended without a fight.

Ref.: ‘One pawn makes way for another in Gujarat’ (September 14). By electing first-time MLA Bhupendra Patel as the new CM of Gujarat, the BJP has tossed all talk of growth, development and employment and its caste calculations have come to the fore, once again. The move is aimed at mollifying the influential Patidar community. UP Governor Anandiben Patel has now had the last laugh, as the new CM is her protege.

Ref.: ‘Dedicated pothole warriors for wards’ (September 14). Now, the BMC’s blaming the bitumen in the asphalt. Perhaps, good quality bitumen or tar used in the first place could have prevented the potholes? So much public money has been wasted on pothole repair. We need a lasting solution and more sincerity.

It’s very simple. Indian cricket head coach Ravi Shastri alone is responsible for the situation resulting in the cancellation of the fifth Test. He was in the UK primarily to be with the team and protect it, including the support staff. However, he left the circle of the team (crossed the ‘Laxman Rekha’) for his personal work and the rest we know. He should be penalised by asking him to resign and pay half his contractual fees as compensation to the BCCI.

The writer is former Editor of Business Today and Businessworld magazines