Ford Explores Resuming Vehicle Production in India for Export
Ford Motor has engaged in discussions with the Indian state of Tamil Nadu to explore the possibility of producing vehicles for export, according to the state’s Chief Minister, M.K. Stalin. This move signals a potential return to India for the U.S. carmaker after its departure three years ago.
Previous Exit from India
In 2021, Ford discontinued domestic car production in India after facing challenges in increasing volumes. The automaker subsequently halted exports in 2022, effectively withdrawing from the world’s third-largest car market. As a result, Ford sold one of its two Indian plants to Tata Motors in 2023, while its other facility in Chennai, Tamil Nadu, was closed.
Discussions with Tamil Nadu
M.K. Stalin revealed that the state had engaged in “engaging discussions” with Ford Motors, aiming to revive their three-decade partnership and leverage Tamil Nadu’s manufacturing capabilities for global exports. The automaker has also acknowledged the ongoing exploration of alternatives for its Chennai plant.
Previous Market Challenges
When Ford exited the Indian market, it had a modest market share of less than 2% in the passenger vehicle segment. The company had struggled to generate profits in the country over a decade, accumulating losses of more than $2 billion. The decision to withdraw was influenced by weak demand for new vehicles and the failure to finalize a joint venture partnership with Mahindra & Mahindra.
Current Operations in India
Despite its exit from vehicle production, Ford maintains a presence in India through its plant in western India, where it manufactures engines for its Ranger pickup trucks. The automaker also sources parts from Indian suppliers for its global operations, signifying its continued involvement in the country’s automotive industry.
