Ford Australia to Stop its Local Production in 2016

The American auto maker, Ford has announced to shut its Geelong and Broad Meadows plants in Australia by October 2016. The major reasons behind this decision are high exchange rates, high losses, high production costs and slowdown in market. 91 years back, the company had started its facility outside Melbourne to develop the 'Model T' and since then it has been developing almost all Ford cars at RHD centre.

Ford Australia had reported that the company had faced 141 million AUD (Rs 76 Crore) loss for 2012 and has also suffered a total loss of 600 million AUD (Rs 323 Crore) over the last five years, which further forced the organisation to stop its local proceedings.

Over 1200 people will lose their jobs after the end of local operations and the move is also expected to affect the companies that supply parts and components to Ford Australia. However, the suppliers also have contracts with other carmakers like Toyota, which will work as a backup and the losses will be lesser for them. Meanwhile, Ford said that despite stopping the productions, it will continue to give full support to its around 200 dealerships across the nation.

Ford Australia also said that after 2016 it will only import vehicles, and it is also expected that the company's global strategy vehicles (EcoSport, Fiesta and Focus) are the only ones which will be run on Australian roads. This clearly indicates that the iconic Falcon sedan that has defined the Australian motoring scene as well its motorsports since its introduction in 1960 will be phased out from the Australian market.

It seems like Ford is aiming to make the Indian and Thai auto market an export hub, where the production cost are comparatively very low. Making cars in Asian market will make them to price them far cheaper and more cost effective. This is the same strategy which Fiat is also looking for, as the company also wants to make India an export hub for its Chrysler brand.