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Ford Motor is returning to the Indian market about three years after discontinuing its operations in the country. The US automaker plans to build cars in its existing factory in Chennai to specifically cater to the export market, bolstering India’s standing as an emerging global hub for automotive manufacturing.
On Friday, the Dearborn, US-based automaker said it will be re-purposing the shuttered Chennai plant to build cars for export to global markets. This is part of the company’s ambitious Ford+ growth plan, it said.
The company submitted a Letter of Intent (LoI) to the Tamil Nadu government “confirming its intention to utilise the Chennai plant for manufacturing for export,” it said.
Ford’s announcement follows a meeting this week between senior company executives and Tamil Nadu Chief Minister MK Stalin during his US visit.
Ford pulled the plug on its Indian operations in September 2021 due to mounting losses and weak sales as well as a global restructuring. During its three-decade-long stint since 1995, the company invested more than $2 billion in India and launched successful models including the EcoSport SUV and Figo small car.
Ford’s Chennai factory located at Maraimalai Nagar spans 350 acres and has an annual production capacity of about 200,000 vehicles and 340,000 engines.”There’s no decision on the domestic market yet and even the plans with regards to the models that will be manufactured and exported here are yet to be ascertained,” said a person aware of the developments.The person said competition has intensified in the Indian car market in the last three years though there are more opportunities now than before. India’s passenger vehicle market surged to 4.2 million units in 2023-24 from 2.7 million units in 2020-21.
“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 of 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.”
Ford said in a statement it would disclose details of car models that would be manufactured in Chennai in due course.
Ford’s return to India underscores its reaffirmation of India being a critical market for the company’s global manufacturing operations.
Ford currently employs 12,000 people in its Global Business Operations in Tamil Nadu, which the company expects to increase by 2,500 to 3,000 jobs within the next three years. Combined with its engine manufacturing operations at Sanand, Gujarat, India represents Ford’s second-largest salaried workforce worldwide.
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