Ford Motor Company is eyeing a comeback in India but with a new focus. Three years after its 2021 exit, when Ford shut down its operations due to financial losses and low market share, the automaker is preparing to re-enter the Indian landscape, primarily through export-oriented production at its Chennai plant.
Why Ford Left in 2021
Ford’s departure from India was driven by a combination of factors: a decade of financial struggles, losses exceeding $2 billion, and a market share that never crossed 2%. This poor performance was worsened by the intense competition from domestic and Asian manufacturers, which have a strong foothold in the price-sensitive Indian market. Additionally, Ford was impacted by the declining car sales in 2019, the worst in two decades, and further compounded by the COVID-19 pandemic.
The 2024 Strategy: Exports First
Ford’s new strategy marks a shift from targeting Indian consumers to focusing on exporting vehicles produced in India. The company plans to restart its manufacturing operations at the Maraimalai Nagar plant near Chennai. However, the catch is that, for now, Ford’s production will primarily serve international markets. This pivot comes as part of the company’s broader global strategy and aligns with India’s government-backed Production-Linked Incentive (PLI) scheme, which aims to boost manufacturing exports.
Tamil Nadu: The Driving Force Behind the Comeback
Ford’s return to India wouldn’t have been possible without the active efforts of the Tamil Nadu government. Often referred to as the “Detroit of India” due to its thriving automotive ecosystem, Tamil Nadu offers strategic advantages such as port access and robust government support. Over the past two years, the state worked tirelessly to revive the facility and attract Ford back into the fold. Their persistence paid off, with multiple rounds of negotiations leading to Ford’s decision to restart operations.
The Bigger Picture
While Ford’s primary focus will be on exporting vehicles, there are indications that this could pave the way for future ventures in the domestic market. For example, the potential reintroduction of models like the Mustang Mach-E and the new Ford Everest has been hinted at, although these will likely arrive as completely built units (CBUs) for a niche segment.
Job Creation and Local Impact
Ford’s return is expected to create 2,500-3,000 new jobs at the Chennai facility over the next few years. This is a significant boost to the region’s economy, particularly for the automotive sector, which has historically relied on the manufacturing strength of companies like Ford.
Is Ford Really Back?
Ford is indeed making a comeback but with a new focus. It’s all about exports for now, and while this news may disappoint Indian customers hoping for the reintroduction of Ford’s popular domestic models, the company’s re-entry into the Indian manufacturing scene signals a renewed commitment to leveraging the country’s automotive expertise for global markets. So, while you may not be driving a new Ford in India anytime soon, the brand’s engines are revving up again in the country.
