Ford Returns To India But There's A Catch

Ford Motor Company announced today that it has submitted a Letter of Intent (LoI) to the Government of Tamil Nadu, indicating its plans to utilise its Chennai manufacturing facility for export-focused production. The move aligns with Ford's broader strategic ambitions under its global Ford+ growth plan.

The announcement came after a meeting between senior Ford leadership and Tamil Nadu’s Chief Minister, who was on an official visit to the United States. The discussions underscored the mutual interest in leveraging the state’s industrial capabilities for Ford’s international operations.

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Ford’s decision to shift the focus of the Chennai plant from domestic manufacturing to export production marks a significant development. The company aims to tap into the existing manufacturing expertise in Tamil Nadu to meet the needs of new global markets, though specific details about the type of manufacturing are yet to be disclosed.

“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.”

Despite Ford's decision in 2021 to cease domestic car manufacturing in India, this new development highlights the company's continued investment in the country. Currently, Ford employs 12,000 individuals in its Global Business Operations (GBO) in Tamil Nadu, and this number is projected to increase by an additional 2,500 to 3,000 jobs over the next three years.

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In addition to its presence in Tamil Nadu, Ford’s engine manufacturing facility in Sanand, Gujarat, continues to contribute to the company’s global operations. With these assets, India now represents Ford’s second-largest salaried workforce worldwide, underscoring the country’s importance in the company’s international business.

While the Chennai facility will focus on exports, Ford reaffirmed its ongoing commitment to its one million Indian customers. The company will continue to provide comprehensive customer support, including vehicle servicing, aftermarket parts, and warranty services, ensuring that current Ford owners in India receive uninterrupted assistance.

Ford’s decision to shift the focus of the Chennai plant is seen as part of its broader Ford+ growth strategy, aimed at optimising its global operations and increasing its presence in key export markets. As the automotive industry shifts towards electrification and innovation, Ford’s strategic move to repurpose existing facilities indicates a focus on maximising operational efficiency and utilising India’s skilled workforce for global production.

Further details about the types of vehicles or products that will be manufactured at the Chennai plant for export are expected to be released in the coming months.