Ford Motor Co is set to re-enter India with a fresh manufacturing plan worth about Rs 3,250 crore ($370 million). The American automaker on Friday announced restarting manufacturing activity at its Chennai facility, marking a major development after its exit from the Indian automotive market in 2021.
The decision comes even as US President Donald Trump has urged companies to bring manufacturing back to America and escalating trade tensions with India. Despite the strained equations, several US firms, like Apple, have recently stepped up investments and expanded their manufacturing footprint in India.
The carmaker said that it has signed a memorandum of understanding with the government of Tamil Nadu, setting out its “strategic direction that leverages India’s manufacturing expertise as part of the Ford+ plan”.
According to Ford, work on the project, including site preparation, will begin later this year. Once ready, the plant will have a planned annual capacity of 2.35 lakh engines, with production scheduled to begin in 2029. The company says the new engines will feature all-new technology, and further details on the engine type and export destinations will be revealed closer to the production start date.
“With an initial expected investment of Rs 3,250 crore, the project is expected to create more than 600 jobs, plus indirect jobs across the industry,” the automaker said in a statement quoted by PTI.
Jeff Marentic, Ford Motor Company’s president for the International Markets Group, said the decision highlights the company’s focus on India’s manufacturing capabilities. “We are pleased to advance our plans and confirm the Chennai plant's vital role in Ford’s manufacturing network,” he said.
“This decision reinforces our commitment to leveraging India’s manufacturing prowess for future products.”
Tamil Nadu Industries Minister T R B Rajaa welcomed the announcement, saying Ford’s plan to resume manufacturing in Chennai will inject fresh momentum into the state’s automotive ecosystem.
Alongside this manufacturing revival, Ford continues to maintain a significant presence in Tamil Nadu through its Global Business Operations, where it employs around 12,000 people.
Ford had stopped producing vehicles in India in September 2021, after nearly three decades in the market, citing continued losses. As part of its restructuring exercise, the company decided to end vehicle manufacturing at both its plants and shift towards selling only imported vehicles. While the Sanand facility in Gujarat was sold to Tata Motors, efforts to wind down operations at the Chennai unit took longer than expected, missing the earlier deadline of the second quarter of 2022.
Last year, Ford submitted a Letter of Intent to the Tamil Nadu government, signalling its plan to repurpose the Chennai plant for export-focused manufacturing, a move that has now formally taken shape with the fresh investment.
Ford’s returning footprint adds to Tamil Nadu’s position as one of India’s largest industrial hubs. The state already hosts manufacturers such as Hyundai Motor Co., Renault SA, and BMW AG.
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