NEW DELHI/CHENNAI: After withdrawing twice from the Indian market, Ford Motor Co is betting on the country for a third time as it announced fresh plans for India through its Chennai factory which it had abruptly refused to sell to Sajjan Jindal’s JSW group despite advanced negotiations.
Ford said on Friday said that it plans to re-start work at the Chennai plant to make cars that are initially aimed for exports to global markets. The company’s statement did not divulge any immediate plans for the domestic market, though it seen as a key reason behind the decision to come back again.
“Ford today announced that it has submitted a Letter of Intent to the Government of Tamil Nadu, confirming its intention to utilize the Chennai plant for manufacturing for export. The announcement follows a meeting between Ford leadership and the Chief Minister of Tamil Nadu as part of his visit to the US,” the company’s statement said, adding, “This strategic move will see the facility repurposed to focus on manufacturing for export to global markets, as part of the company’s ambitious Ford+ growth plan.”
TOI was the first to report on Ford’s impending entry to India in its editions dated December 20 last year, and on August 3 this year.
“We are grateful for the ongoing support from the Tamil Nadu Government as we explored different options for the Chennai plant,” said Kay Hart, president, Ford International Markets Group. “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,” the company said, adding that further information about the type of manufacturing and other details will be disclosed in “due course”.
Friday’s announcement by Ford follows a meeting between the company’s leadership and Tamil Nadu chief minister MK Stalin as part of his US tour.
Ford, which had invested over $2.5 billion in India and tasted success with products such as Eco Sport mini-SUV and Figo small car before it called it quits, now believes that Indian market and manufacturing here will help it navigate global business as many markets in the West stagnate. Also, with China and Europe not being significant businesses for the company, India is where it is pinning its hopes on. “Increasingly, the feeling is that it is not right to stay out of India, especially as the brand is still well-known to potential buyers,” a source said.
Ford has had a checkered history in India as the company was never able to build a solid business case in the country despite being present here for over three decades (it first set foot in India in 1995). The company did business as a solo entity, and also in partnership with Mahindra & Mahindra with whom it had joined hands when it entered the country in late nineties and thereafter around 2019. However, the JVs failed to work on both occasions.
Having failed to make any impact alone, the company had first announced its exit in September 2021, before making a surprise re-entry in February 2022 when it bagged benefits under the production-linked incentive (PLI) scheme for electric vehicles. However, it soon announced a withdrawal in May 2022, possibly finding it more viable to sell the factories than running a loss-making business.
The last withdrawal had seen the company sell one of its factories at Sanand in Gujarat to Tata Motors, which has now been upgraded by the Indian company to fulfil its expansion needs.
Ford said that the announcement “reaffirms its commitment to India as a critical market for the company’s global operations.”
Ford currently employs 12,000 individuals in Global Business Operations in Tamil Nadu, a number expected to grow 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.
Ford also has over 10 lakh customers in India to whom it continues to provide customer support, including service, aftermarket parts, and warranty.
| 1995 | Started business in India in partnership with Mahindra & Mahindra |
| 1998 | Became solo operations as Ford-Mahindra partnership ended |
| 2019 | Struggling Ford re-aligns with Mahindra once again, announces an ambitious joint venture |
| Dec 31, 2020 | Ford-Mahindra JV called off |
| Sept 9, 2021 | Withdraws from India, announces closure of vehicle manufacturing by Q2, 2022 |
| Feb 11, 2022 | Ford makes a second comeback, selected for PLI scheme for manufacturing and selling electrics |
| May 12, 2022 | Withdraws from country, takes back PLI application |
| Sept 13, 2024 | Re-enters India for third time, announces production plans from Chennai for global markets |
Stats
Total investments in India so far:
$2.5 billion
Accumulated losses at the time of withdrawal :
$2 billion
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