Published By: Sayan Paul

Ford To Make India Re-Entry: What's Behind Its Comeback Plans?

According to the latest reports, Ford is now planning to restart its manufacturing plant for exports in Tamil Nadu.

"... this step aims to underscore our ongoing commitment to India." - Kay Hart (President, Ford International Markets Group)

US automaker Ford stopped its operations in India in 2021, and then pulled the plug on all its exports from India the following year. The reason behind that lay in the severe challenges that the company faced in the mass-market segments. However, things have changed in recent times, with speculations of Ford making a comeback here doing rounds. Finally, the automaker announced its plans to re-enter the Indian market - although will only manufacture cars for exports from Chennai plant.

Notably, this comes after Tamil Nadu Chief Minister MK Stalin met Ford officials during his recent US visit, discussing the Ford+Growth plan and the possibility of their investments in Tamil Nadu. As Kay Hart, president of Ford International Markets Group, shared in a statement, "We are grateful for the ongoing support from the Tamil Nadu Government as we explored different options for the Chennai plant. This step aims to underscore our ongoing commitment to India as we intend to leverage the manufacturing expertise available in Tamil Nadu to serve new global markets.”

Credit: Dr. T R B Rajaa

Well, Ford exited the Indian market due to low sales and financial losses. As the company prepares to make a re-entry, let's discuss what may be driving its comeback plans.

What's Fueling Ford's Comeback to India?

After selling its Gujarat plant to Tata, Ford was considering to sell its Tamil Nadu plant as well. However, last year, the company abandoned that plan and finalized a deal with the Sajjan Jindal-led JSW Group.

The Indian automobile market has been growing rapidly in recent years, becoming one of the largest in the world. Several foreign brands expanded their presence to India, and tasted success in short period. This may have propelled Ford to regain its dominance here.

Credit: Shiv Aroor

Also, Ford experienced success with several of its latest models, especially the EcoSport mini-SUV and the Figo small car. As China's and Europe's markets have become less significant over the past few months, India has emerged as a "focus for growth" for Ford. The brand is quite popular among Indian buyers and has great scope for business here.

On the other hand, experts believe that the Government of India's new EV policy has been a major pull for Ford. The Faster Adoption and Manufacturing of Electric Vehicles (FAME) I and II scheme helped sell over 1.6 million EVs in India. The Union Cabinet recently approved a new scheme called PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) to promote mass adoption of EVs.

Credit: Auto News India - ANI

What Lies Ahead for Ford in India?

According to reports, Ford has submitted a letter of intent (LOI) to the Tamil Nadu government to restart its production in Chennai. However, details about its models and all will be disclosed later.

With this Chennai plant, Ford will focus only on exports (especially electric vehicles). There's no update on resuming its sales in India yet.

The Maraimalai Nagar factory, which was closed in August 2022, will become a major part of theFord+ Growth Plan. Notably, Ford currently has 12,000 employees at its Global operations in Chennai. The workforce is expected to grow by 2,500 to 3,000 more people in the next three years.

Credit: YourStory Tamil

It's worth noting that the Chennai plant spans 350 acres, and has an annual production capacity of 200,000 vehicles and 340,000 engines.