Ford to Revive Chennai Plant for Export Market Three Years After Exiting India

Chennai: Three years after its exit from India, Ford announced on Friday the revival of its manufacturing facility in Maraimalai Nagar, near Chennai, to cater to the export market. This significant development follows continuous efforts by the Tamil Nadu government to either push the automotive giant to restart operations or sell the facility to another automobile company.

A Major Win for Tamil Nadu

The announcement came two days after Tamil Nadu Chief Minister M K Stalin‘s meeting with Ford representatives in Chicago, during which he requested the company to restart its plant. Ford’s decision marks a major win for Tamil Nadu’s efforts since 2021, where the government has been in talks with Ford to either resume operations or find potential buyers for the 350-acre facility.

Notably, several automakers, including Tata Motors, MG Motors, and Vietnam’s VinFast, had shown interest in purchasing the plant, but none of these deals materialised. The revival of the Maraimalai Nagar facility by Ford is seen as a significant step in reaffirming Tamil Nadu’s position as an automotive manufacturing hub.

Ford’s Commitment to India

Ford’s president of International Markets Group, Kay Hart, highlighted the importance of this move. “This step aims to underscore our ongoing commitment to India as we intend to leverage the manufacturing expertise available in Tamil Nadu to serve new global markets,” she said in a statement.

This decision aligns with Ford’s broader Ford+ growth strategy, which seeks to repurpose the facility for manufacturing vehicles for international markets. However, the company has not yet clarified whether it will manufacture conventional vehicles or focus on electric vehicles (EVs). Details about the nature of production and timelines for restarting operations are expected to be released soon.

Job Creation and Economic Impact

Ford’s return to Chennai is expected to significantly boost employment in the region. According to the company, the revival of operations will add an additional 2,500 to 3,000 jobs over the next two to three years. Ford already employs approximately 12,000 people in Tamil Nadu through its Global Business Operations.

The decision to restart production at the Maraimalai Nagar facility represents a positive development for the state’s economy. Tamil Nadu has long been a leading automotive manufacturing hub in India, and Ford’s return further cements the state’s position. The plant, which is spread over 350 acres, had an annual production capacity of 200,000 vehicles and 340,000 engines before it was shuttered.

Ford’s Troubled Past in India

Ford initially exited the Indian market in 2021 after facing sustained losses. The company struggled to make its business model work in a highly price-sensitive market. Despite being one of the first global automotive giants to set up manufacturing operations in India in the 1990s, Ford was unable to establish a sustainable foothold.

In 2022, the company had indicated plans to re-enter the Indian market with a focus on electric vehicles (EVs). However, Ford abandoned these plans later in the same year, leaving the Maraimalai Nagar plant idle. This latest announcement marks a definitive shift in strategy, with the company now focusing on exports rather than catering to the domestic market.

The Rise of Chennai as an Automotive Hub

Ford’s re-entry into Tamil Nadu is not just a win for the state government but also reinforces Chennai’s status as a prominent automotive manufacturing hub, often referred to as “India’s Detroit.” Ford’s original entry into Chennai in 1995 played a pivotal role in transforming the city into a magnet for other global automakers.

Following Ford’s lead, major automotive brands such as Hyundai, Renault-Nissan, and BMW established their production bases in Chennai, making it one of India’s most significant automobile manufacturing centres. More recently, Tata Motors pledged an investment of ₹9,000 crore for a new car manufacturing plant in Ranipet, further bolstering Tamil Nadu’s automotive sector.

Conclusion

The revival of Ford’s Chennai plant is a major milestone for both the company and the state of Tamil Nadu. Ford’s focus on exporting vehicles from the Maraimalai Nagar facility reflects a strategic shift and reaffirms its commitment to leveraging India’s manufacturing capabilities. While details on the production timeline and the type of vehicles remain unclear, the move is expected to create thousands of jobs and contribute to the state’s thriving automotive sector.