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Ford gears up for a bold return to India: Here’s what we know
This strategic decision follows a meeting between Chief Minister MK Stalin and Ford’s leadership during the Chief Minister’s recent visit to the United States
A visitor is reflected as he takes pictures of a new Ford Aspire car during its launch in New Delhi, India, October 4, 2018. Picture taken October 4, 2018. REUTERS/Anushree Fadnavis/File Photo
Ford Motor Company is setting the stage for its return to the Indian market by revamping its manufacturing operations at the Chennai facility, with a primary focus on exports to global markets. This strategic decision follows a meeting between Chief Minister MK Stalin and Ford’s leadership during the Chief Minister’s recent visit to the United States.
The president of Ford International Markets Group, Kay Hart, expressed appreciation for the support received from the Tamil Nadu Government as the company evaluated various options for the Chennai plant.
“This initiative demonstrates our steadfast commitment to India, aiming to harness the manufacturing capabilities present in Tamil Nadu to cater to new international markets,” stated Ms Hart as quoted by The Economic Times. Further specifics regarding the types of manufacturing processes and additional details will be disclosed at an appropriate time, as conveyed in a press release.
Tracing the Roots of Ford’s Reinvestment Strategy
The rationale behind Ford’s renewed investment in India can be traced back to its unexpected exit from the Indian market in September 2021. After this departure, the company contemplated participating in the government’s Production Linked Incentive (PLI) scheme but subsequently withdrew from its plans to produce electric vehicles for global sales in India. Despite the exit, discussions about Ford’s potential re-entry into the Indian automotive industry have persisted, particularly considering the rapid maturation of the Indian automobile market and the success of foreign brands such as Kia and MG Motors.
The Tamil Nadu Plant
Last year, Ford made headlines when it decided not to sell its Tamil Nadu plant, previously its last operational site in India, after finalising an agreement with the JSW Group led by Sajjan Jindal. This decision reignited speculation about Ford’s revival in India, especially as the market dynamics shift and positions itself as a focal point for growth, particularly when the automotive markets in China and Europe show signs of stagnation. Sources suggest that there is a prevailing sentiment within the company that remaining absent from the Indian market is not a viable option given the brand’s recognition among potential consumers. Moreover, India’s newly established electronic vehicle policy is anticipated to be a significant attraction for Ford as it strategises its re-entry.
A New Chapter in Ford’s Indian Operations
Ford’s strategic pivot towards its Chennai facility underscores its commitment to India, signalling a new chapter in its operations aimed at leveraging local manufacturing talent and responding to the evolving automotive landscape.
