Ford returns to India: US Motor company to start manufacturing cars to export in 2024

Ford, an American automaker, made an announcement on Friday, 13 September, to reenter the Indian market. The motor company aims to repurpose their manufacturing plant in Chennai, Tamil Nadu, for producing vehicles. Their main goal is to utilize the plant for the export of vehicles in the global market under its growth plan.

This announcement preceded a meeting between M.K. Stalin, the chief minister of Tamil Nadu, and Ford officials during Stalin’s visit to the United States. The motor company has given in a letter of intent (LOI) to the Tamil Nadu government stating their plan to start operating in Maramalai Nagar plant, Chennai, again.

For now the company will be focusing on exports only and has not mentioned any plan for domestic sales. “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,” commented Kay Hart, president, Ford International Markets Group. They will disclose more information about their full plan and the details of manufacturing soon.

Reason behind their return

Ford‘s comeback to India’s car market was always the topic of speculation after their exit in September 2021 which was due to high competition with local brands and less revenue. In previous years, they were consistent in appearing in India. They had applied for participation in the Production Linked Incentive (PLI), the government’s initiative to boost investment, manufacturing and exports, but it was later laid down by the motor company. Last year, Ford canceled their plans for selling its last factory site in India, situated in Chennai, in spite of finalizing a deal with the JSW Group. This news laid the foundation for their interest in reentering the automarket of India.

Benefits from the return of Ford

The Motor Company is known for its brand value and vehicles like Mustang, and F-Series pickup trucks. Their discussions with the Tamil Nadu government focuses on leveraging India’s growing auto market. Therefore, their return can be proven beneficial for India’s growth market, investment and export services.

They also plan to increase the employment rate by their comeback to India. In a statement, they claim that “Ford currently employs 12,000 individuals in Global Business Operations in Tamil Nadu, expected to grow the number by 2,500 to 3,000 jobs within the next three years. Combined with the engine manufacturing operations in Sanand, India represents Ford’s second-largest salaried workforce worldwide.”