No Luck For Ford In India

When Ford Motor Company ($F@US) built its first factory in India in the mid-1990s, U.S. carmakers believed they were buying into a boom - the next China. The economy had been liberalized in 1991, the government welcomed investors, and the middle class was expected to fuel a consumption frenzy. Forecasters said that rising disposable income would help foreign carmakers gain a market share of as much as 10%. It never happened. Last week, Ford took a $2 billion hit to stop making cars in India, following General Motors ($GM@US) and Harley-Davidson ($HOG@US) in closing factories in the country. After sinking $2.5 billion in India since entry and spending another $2 billion over the past decade alone, Ford decided not to invest more. "To continue investing ... we needed to show a path for a reasonable return on investment," Ford India head Anurag Mehrotra said last week. "Unfortunately, we are not able to do that."