Ford's Return To India? U.S. Car Maker Axes Chennai Factory Sale To JSW Group

Ford Motor Co has unexpectedly withdrawn plans to sell its sole remaining factory site in Tamil Nadu, India, under a deal with JSW Group, sparking speculation about a potential re-entry into India’s auto market, which Ford deaprted from over two years ago, following widening losses.

What Happened: The Maraimalai Nagar-based plant, on the chopping block since Ford’s 2021 exit, was expected to be acquired by JSW Group for around $100 million (₹832 crore). However, Ford recently canceled the deal, prompting speculation about its future strategy in India, Economic Times reported, citing sources.

The Ford plant, strategically located near Chennai port, spans 350 acres with an annual capacity of 150,000 cars and 340,000 engines. It has been inactive since July 2022.

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Other companies, including Vietnamese e-carmaker VinFast and Mahindra & Mahindra, had shown interest in the plant. JSW’s planned entry into electric vehicles (EVs) was a key aspect of the acquisition plan.

Ford India had turned profitable in financial year 2023, reporting a profit of ₹505 crore, led by exports, before it ceased vehicle manufacturing operations in the country. The Indian auto market has experienced significant growth since then, especially in the EV segment, prompting global automakers to reconsider their India strategies.

Ford’s decision to retain the Chennai plant adds uncertainty to its plans in India, raising questions about its future involvement in the rapidly evolving Indian automotive landscape. The company has undergone significant restructuring, including ending discussions with Mahindra & Mahindra on a joint venture in 2021.

The unexpected move also comes amid changes in Ford’s leadership, with the appointment of India-born Kumar Galhotra as COO in October. The company has been navigating challenges globally, with recent financial adjustments and guidance cuts.

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