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New York (CNN Business) -
Ford will shut down its production in India, which has represented a loss of revenue of about $ 2 billion.
In an announcement Thursday, the company said about 4,000 employees will be laid off and manufacturing will end immediately.
CEO Jim Farley said the move was "difficult but necessary" to achieve long-term growth.
"Despite having invested significantly in India, Ford has accumulated more than $ 2 billion in operating losses in the last 10 years and demand for new vehicles has been much weaker than anticipated," said Farley.
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Ford's India boss Anurag Mehrotra said the unit has not been able to find a "sustainable path to long-term profitability that includes vehicle manufacturing in the country."
He added that the decision was "bolstered by years of accumulated losses, persistent overcapacity in the industry and a lack of anticipated growth in the Indian auto market."
Ford has struggled in India for a long time.
The automaker began operating there in 1995, and has invested more than $ 2 billion in the country over the past 25 years.
Two plants in the cities of Sanand and Chennai will close in the coming months and the company will "work closely" with employees affected by the closures.
In 2019, Ford struck a deal with local rival Mahindra to transfer most of its business in India to a new joint venture, but the deal was broken late last year.
The companies cited "fundamental changes in global business and economic conditions" caused in part by the pandemic.
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Ford is the latest American automaker to shut down its operations in India in recent years.
General Motors announced in 2017 that it would stop selling cars in the country.
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