Ford Motor Company, which shut its shop in India in August 2022, is now re-establishing its presence in India by resuming operations at its Chennai facility.
This decision comes in alignment with the company’s “Ford+ Growth Plan” which focuses on the electric vehicles (EVs) and targeting exports to Southeast Asia.
Ford to Revive Chennai Plant as Part of New Strategy
The Maraimalai Nagar plant in Chennai, which was close 2 years ago, is now set to revive and also play a pivotal role in the renewed strategy of the company. This news comes just after the recent visit of Tamil Nadu’s Chief Minister M.K. Stalin to Ford’s headquarters in Dearborn, Michigan during which the government emphasized the state’s growing EV ecosystem, highlighting by the presence of companies like Vinfast and Tata JLR setting up new plants.
As per the president of Ford’s International Markets Group, Kay Hart, the company had submitted a letter of intent to the state government of Tamil Nadu over the use of Chennai plant for manufacturing vehicles for export.
This decision is also in line with the global brands who have re-entered the Indian market via strategic partnerships. These includes the likes of Shein and Carrefour.
With interest from several automotive investors including Ola Electric and Hyundai Motor India, the government had been actively seeking new users or buyers for the factory. Talks with Ford re-intensified in mid-2023 post which Ford committed to reactivating the plant.
Tamil Nadu’s Industries Minister TRB Rajaa and Chief Minister Stalin both assured full government support to facilitate Ford’s reintegration.
Ford Revived Plans, Past Losses and Global Strategy
With an annual capacity of 200,000 vehicles and 340,000 engines, the 350 acres of Chennai plant benefits from its strategic location near Chennai and Ennore ports.
Previously, the company had burned fingers as well as $2 billion over the period of 10 years in India, all of this with less than 2% market share. However, the tables are turned and with new vigour Ford intends to re-enter the Indian market and leverage Tamil Nadu’s manufacturing strengths to enter new global markets.
When Ford was operation, it supported many Indian customers and employed large workforce in the region. When it closed the plant, it made a severance payout of Rs 1,296 crore to 2,592 workers.
The return to India marks a significant step in Ford’s global strategy, with plans to hire up to 3,000 more employees in the coming years.
