Ford to invest ₹3,250 cr in Chennai plant for 'next-gen' engine production

Company signs agreement with Tamil Nadu government, expected to create more than 600 jobs with new plan

American carmaker Ford has announced plans to invest about ₹3,250 crore to manufacture powertrains at its Chennai plant, focusing on “next-generation” engines. The company is considering using its Maraimalai Nagar facility on the outskirts of the city as an export hub, with an annual capacity of 235,000 units and production scheduled to begin in 2029. 

Building on a letter of intent signed in September 2024, Ford representatives and the Tamil Nadu government on Friday formalised a memorandum of understanding (MoU) setting out a strategy to tap into India’s “manufacturing prowess”. Senior Ford executives met Chief Minister M K Stalin as part of the agreement, which is likely to see the facility play a key role vis-à-vis the company’s Southeast Asian markets. 

The MoU complements Ford India’s existing infrastructure for producing and exporting engines. “We are pleased to advance our plans and confirm the Chennai plant’s vital role in Ford’s manufacturing network,” said Jeff Marentic, president of Ford’s international markets group. Ford sold its vehicle manufacturing facility in Sanand to Tata Motors in 2022, but continues to operate its engine plant there for export markets. 

“We are thankful to the Government of Tamil Nadu for its continued support as we advance these plans,” Marentic added. “This decision reinforces our commitment to leveraging India’s manufacturing prowess for future products.” 

Details about the specific engines to be produced in Chennai, and their export destinations, will be disclosed closer to the start of production. 

Tamil Nadu Industries Minister T R B Rajaa welcomed the announcement, calling it “a boost to the resurgent automotive sector of Tamil Nadu”. “It speaks volumes about the state's robust manufacturing ecosystem, highly skilled workforce, and excellent investor facilitation,” he said. 

The decision marks Ford’s return to manufacturing in Chennai two years after it halted production at the Maraimalai Nagar plant in August 2022. The site’s location, less than 50 km from Chennai port and 74 km from Ennore port, offers strong logistical advantages, with Bengaluru also just 320 km away by road. 

At the time of its exit, Ford India had reported accumulated losses of around $2 billion over a decade and held less than a 2 per cent share of the country’s passenger vehicle market through models such as the EcoSport and Endeavour SUVs. 

“This is not just the restart of manufacturing at the existing Ford facility,” Rajaa said. “It is the state taking yet another step towards the future of the automotive industry with the production of nextgen engines. We remain committed to supporting Ford's operations here.” 

The new investment is expected to create more than 600 direct jobs, along with indirect employment across the automotive supply chain. Ford currently employs about 12,000 people at its global business operations unit in Tamil Nadu. 

The company said it continues to serve more than one million customers in India through service, aftermarket parts, and warranty support. The shutdown of the Maraimalai Nagar factory in 2022 reportedly cost Ford’s India arm about ₹1,296 crore in severance payments, benefiting 2,592 workers.