Ford to restart Chennai plant for engine export, no plans of car production

US carmaker Ford has decided to restart its factory near Chennai to produce and export engines and related parts. Sources familiar with the matter told The Economic Times that an official announcement is expected in the second quarter of this year. However, Ford will not manufacture vehicles in India as part of this plan.

 

The plant, located in Maraimalai Nagar, has been idle since mid-2022. Ford stopped making cars in India in 2021 and exited the market in 2022 after struggling to gain a strong foothold for over 25 years.

 

The report mentioned that there were concerns that Ford might drop its India plans due to US policies encouraging local production and higher import taxes. However, two Indian government officials confirmed to The Economic Times that the plan is moving forward. Ford executives have also discussed their commitment to India with the Tamil Nadu government.

 

 

This decision aligns with Ford’s global strategy. The company already exports components from Sanand, Gujarat, where it sold most of its factory to Tata Motors in 2022. The Chennai plant will now focus on export-related production.

 

Ford had previously explored launching electric vehicles in India, including models like the Endeavour, Everest, and Mustang. However, these plans have been put on hold as the company shifts focus to exports.

 

With all Ford dealerships closed in India, the company now maintains only service centres. Industry experts believe this highlights Ford’s intent to concentrate solely on export operations from India.

 

Ford’s exit India story 

 

The company had been in India for over 25 years, but faced tough competition with other car brands. Ford's cars were often seen as expensive to maintain, and the company could not capture a big share of the market.

 

In September 2021, Ford announced that it would stop making and selling cars in India due to heavy financial losses — reportedly around $2 billion over ten years. It shut down its factories in Chennai and Sanand by mid-2022. The company later sold most of its Sanand plant to Tata Motors, but kept the Chennai plant idle.

 

In 2022, Ford completely left the Indian market. It closed its factories in Chennai and Sanand