Ford to restart manufacturing in India for exports

Ford is coming back to India. It was back in September 2021, that the automobile giant stopped domestic operations, having struggled to make deep inroads in the Indian market and accumulating over $2 billion of operating losses over ten years. Three years later, the company has announced its return, although for now, it will only look at manufacturing here for export markets.

Ford had two manufacturing plants in India. In 2023, it sold its plant in Sanand, Gujarat, to Tata Motors. The plant in Chennai was closed, but the company didn't sell it. It is this plant that the company will use to produce vehicles for exports.

"We have submitted a letter of intent (LOI) to the government of Tamil Nadu in India, outlining Ford’s intention to utilise our Chennai plant for manufacturing for export," Kay Hart, president, international markets group, Ford Motor Co, said on Friday.

There have been multiple meetings between the Tamil Nadu government and company officials in the last few months. Earlier this week, during his visit to the United States, M.K. Stalin, the chief minister of Tamil Nadu, had held meetings with Ford officials, including Hart.

"Had a very engaging discussion with the team from Ford Motors! Explored the feasibility of renewing Ford’s three-decade partnership with Tamil Nadu, to again make in Tamil Nadu for the world," Stalin had said on September 11.

Ford was among the first foreign automobile giants to enter India in the 1990s. However, despite some good products like the Figo hatchback, Icon sedan and Ecosport compact SUV, the company was never able to scale up its share to match the likes of Maruti Suzuki and Hyundai Motor. Just before Ford announced its exit, its US rival General Motors too had shut shop here.

India has predominantly been a small car market and these US auto giants, which excelled in making big SUVs struggled here. However, in the last few years, there has been a rising demand for sports utility vehicles, while entry-level car sales have slowed. That perhaps could be a reason why Ford wants to relook at India. As per a report by Autocar India, Ford has looked at importing and selling its Everest SUV in India. Ford hasn't officially commented on that.

For now, Ford says it intends to leverage the manufacturing expertise available in Tamil Nadu to "serve new global markets." Hart said more details like the type of manufacturing and export markets the company will be focusing on will be disclosed in due course.

Ford already has over 12,000 employees in its global Business Solutions team in Chennai. The company plans to increase that headcount by another 2,500-3,000 in the next few years.