It’s Official: Ford India To Restart Chennai Factory
American automaker Ford exited its Indian operations nearly three years ago, leaving both customers and fans of the brand in somewhat of a lurch. While speculations have been rife about Ford making a comeback into India over the past year or so, the American automaker has refrained from making an official announcement. Well, that’s until now.
Things seem to have gotten moving after Tamilnadu Chief Minster MK Stalin met senior Ford officials during his recent US visit. Following this meeting, Ford has put out an official statement about restarting the Maramalainagar factory at Chennai.
Don’t get excited though
Ford’s plans to restart the Chennai factory is aimed solely at exports for now. Domestic sales operations will continue to remain suspended, and the automaker will only run service and spares to support existing Ford owners in India.
Meanwhile, here’s official word from Kay Hart, the president of Ford’s International Operations. Here’s what she posted on LinkedIn,
I am pleased to share that today we are announcing that we have submitted a Letter of Intent (LOI) to the Government of Tamil Nadu in India, outlining Ford’s intention to utilize our Chennai plant for manufacturing for export.
The decision follows multiple meetings with the Tamil Nadu Government, including one I had last week with the Honorable Chief Minister of the Government of Tamil Nadu as part of his visit to the United States. We appreciate their ongoing support as we have explored different options for the plant.
This step underscores our ongoing commitment to India as we intend to leverage the manufacturing expertise available in Tamil Nadu to serve new global markets. I know people will be curious, but we will have more to share about the type of manufacturing and which export markets we’ll be focusing on, along with other details, in due course.
For right now, I’m excited that this decision will add to our growing employee base in Chennai; our global Ford Business Solutions team based there is already more than 12,000 strong and we are planning to increase that by another 2,500 to 3,000 team members in the next few years. When you add that with our engine manufacturing team in Sanand and our ongoing customer and dealer support team, India is Ford’s second-largest employee base worldwide.
As this statement reveals, Ford continues to operates its IT division in Chennai, which has a significant workforce of 12,000 people. Ms. Hart has also outlined plans to expand this operation by hiring 2,500-3,000 people in the next few years. Ford continues to operate an engine manufacturing facility at Sanand, Gujarat, again geared solely for the export market. While Ford did sell its car making factory at Sanand to Tata Motors recently, it chose to retain the engine making facility. While Ford had also put up the Chennai factory for sale, the deal didn’t materialize.
Will Ford restart domestic sales in future?
It may, especially given how large the Indian market is and how much more headroom there is to grow. A global carmaker like Ford simply cannot ignore such a market, whose car penetration is just a fraction of that of western countries. For now though, Ford’s focusing on exports, leveraging India’s strengths as a low cost-high quality manufacturing hub. Given the Ford has operated in India for over 25 years, it does know the market quite intimately. A revised strategy for the Indian domestic market can be formulated at a future date. It’ll be unwise to write Ford off just as yet.
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