Ford’s Chennai plant has remained unused since 2022, following the company’s decision to end production in India
As part of its global restructuring process, Ford had decided to stop production for the Indian market in 2021. While the Sanand plant in Gujarat was sold to Tata Motors, the Maraimalai Nagar plant in Chennai was retained.
Last year, Ford had submitted a Letter of Intent (LoI) to the Tamil Nadu government. It revealed plans to start production at the Chennai plant for export markets. However, with the recent tariffs imposed by the Trump administration, Ford is rethinking its strategy. Let’s explore more details on this development.
Ford’s production strategy for India
As part of its earlier plan, Ford continues to hold discussions with the state government. Ford spokesperson has stated that it maintains its position on the original plan to restart manufacturing at the Chennai facility for export markets. More details about the type of production to take place at the Chennai plant and other related information are expected to be revealed in the near future.
The Tamil Nadu government has pledged full support and is keen to see Ford resume production. It will help the state strengthen its position as a leading auto manufacturing hub. However, new report indicates that the recent tariffs announced by the Trump administration may have prompted Ford to rethink its manufacturing plans in India. A meeting of the company’s top executives is expected to be held soon, which will potentially decide the future of Ford’s Chennai plant.
Profits are necessary to sustain production and no company can bear losses indefinitely. With the recent tariff situation, the financial viability of Ford’s Chennai plant may have been adversely impacted. When the plans to restart production were announced in 2024, Trump tariffs were not in the picture.
While not official, a source reveals that Ford basically has two options regarding its Chennai plant. It can either start operations or write off the investment entirely. It is important to note that the company’s decision about its Chennai plant will not have any impact on its Ford Business Solutions (FBS) division. This comes under the services sector, which remains exempted from tariffs. A global hub for technology, engineering and business services, FBS employs around 12,000 people in Chennai.
Focus on Europe
Amidst the prevailing uncertainty, another important aspect to consider is Ford’s global roadmap for the future. As per the source, India is no longer a priority market for Ford. The company is focusing on Europe, where it has committed investments worth tens of billions.
One of the focus areas is electric vehicles. For this, Ford has invested in a major EV initiative in Cologne. A number of new electric models will be launched in Europe. The company has invested heavily in developing advanced battery packs. A component manufacturing hub is coming up in the UK, while Rs 4.4 billion has been allocated to boost operations in Germany.
