Ford All Set To Restart India Factory: Fresh Details Surface
Discussions on Ford's proposed India re-entry are active among enthusiasts. Many await it, while others see it with suspicion. We now have fresh news about Ford's India operation plans. The American auto giant is said to have finalised its plans to restart the mothballed Chennai plant soon. There is, however, a catch. Instead of using it to produce cars and SUVs, Ford is likely to manufacture engines and related components for export, at the Maraimalai Nagar facility- reports ET. Details of this plan are expected to surface later this year.
Vehicle Manufacturing Isn't Part Of Ford's India Strategy?
Well, reports say so! “Ford is going to be making engines at the Chennai plant. It (the facility) will be repurposed for export-focused production. This decision is part of Ford's broader global strategy.” a person aware of the developments reportedly told ET. No official word on the same has been shared by the manufacturer yet.
The operations of Ford's Chennai plant ceased in mid-2022, sometime after the carmaker announced its India-exit. The factory had, however, stopped producing vehicles in 2021.
Recent reports have pointed to ongoing discussions about reviving the Chennai plant. Some speculated that Ford could use it to assemble the likes of the Ranger and the Everest- and could also modify it for EV production in the future.
But looks like the carmaker has shelved these plans, probably due to Trump's new policies that urge American carmakers to move their production facilities back to the U.S. He seems to be particular about the local manufacturing of high value goods, especially from American brands.
In February this year, the American President imposed higher tariffs on imports from Canada, Mexico and China. India isn't included in this list, but there definitely exists a vulnerability there.
Ford will need to invest huge sums to revamp the Chennai facility and modify it in a way that would enable the production of electric vehicles. The Trump Administration may not be pleased by such a move. We saw him express how unhappy he is with Elon Musk's idea of setting up a plant in India. It thus makes sense to assume a similar scenario with Ford as well.
The carmaker reportedly had a high-level discussion with the Tamil Nadu Government recently, and 'reiterated their commitment to India'. It could thus be a matter of time before we get to know what products would be made at the Chennai facility.
The engine manufacturing plans are part of Ford's broader global strategy according to some people aware of the developments. All export-focussed projects are reported to have made ample progress, and an official announcement is expected soon.
Why The Export-Focussed Strategy Could Be Rewarding?
Ford has lately been shutting down all its dealerships and keeping just the service centres and touch points operational. This hints at an oncoming 'export-only' strategy from the manufacturer. Such an approach could be rewarding as India excels as an export hub, backed by strong government policies.
Our country offers high-quality manufacturing at a relatively low cost. One shouldn't be surprised if we say that the manufacturing costs in India could be lower than those in China! The quality of labour here, is also excellent. This is one of the biggest reasons that companies from across spheres and niches choose India as their preferred manufacturing hub.
Ford's EV And ICE Product Plans For India: A Bad Idea?
Earlier reports suggested Ford to be evaluating the Ranger, Everest (Endeavour) and a slew of electric vehicles for the Indian market. The Everest was assumed to be the first to arrive. Electric vehicles including the Mustang Mach E, were expected to be brought as CBUs initially, before making a slow transition into local manufacturing/ assembly.
As per the latest reports, these plans seem to have been shelved. Wondering what would have gone wrong if these vehicles were launched in the Indian market? Well, the short answer would be financial viability!