In September 2021, Ford withdrew from the Indian market after facing challenges in maintaining competitiveness with its extensive lineup of internal combustion engine (ICE) models, which included the Figo, Aspire, EcoSport, and Endeavour.
After a three-year break, Ford Motor Co. is re-entering the Indian market with a strategic pivot towards producing electric vehicles (EVs) aimed at global markets, as disclosed by an individual familiar with the company’s plans. This represents a significant shift from Ford’s previous focus on the local sales of internal combustion engine (ICE) vehicles in India prior to its 2021 exit. Although electric vehicles are now the priority, Ford is considering importing ICE vehicles in “limited batches” as completely built-up or completely knocked-down kits once it resumes domestic operations.
Previously, Ford struggled to stay competitive in the Indian market, where it had established a substantial presence with ICE vehicles like the Figo, EcoSport, Endeavour, and Aspire. It operated manufacturing facilities in Sanand, Gujarat—sold to Tata Motors in 2022—and Maraimalai Nagar, near Chennai, which ceased operations in July 2022 and scaled back to support existing Ford vehicle owners in India with parts.
With the global automotive industry leaning towards EVs, Ford is realigning its focus towards this emerging sector. A company insider mentioned that 2025 would mark a pivotal year for the EV market in India, noting that manufacturing petrol or diesel vehicles would no longer be economically viable. In response, Ford is overhauling its Chennai plant to establish a dedicated assembly line for battery-driven models. This adjustment significantly departs from Ford’s earlier emphasis on traditional ICE vehicles. As part of its re-entry strategy, Ford has communicated its plans to the Tamil Nadu government through a letter of intent, which was bolstered by discussions with the state’s Chief Minister, MK Stalin, during his recent visit to the US about revitalizing the Chennai facility, which boasts a capacity of 200,000 vehicles and 340,000 engines annually.
Ford’s initial step would involve establishing a robust supplier network for EV components, including battery parts. Once the supplier base is established, Ford plans to commence the production of electric cars from its Chennai facility, targeting global markets through nearby ports and eventually introducing these vehicles to the Indian market.
Ford Motor India’s spokesperson has stated that further details about the manufacturing types and other specifics will be released in due course, preferring to stay reticent on speculative matters. A recent press release confirmed the Chennai facility would be “repurposed” for export manufacturing as part of Ford’s global Ford+ growth strategy, emphasising the company’s ongoing commitment to India by leveraging Tamil Nadu’s manufacturing prowess to access new global markets, as articulated by Kay Hart, president of Ford International Markets Group.
Ford’s decision to re-enter the Indian market with a focus on electric vehicles is seen by industry experts as a well-calculated and necessary strategic move, potentially positioning the company for long-term success. Puneet Gupta, director at S&P Global Mobility, remarked that Ford’s re-entry is a strategic recalibration necessary for its phase 3.0 in India. Ford’s strong localisation efforts previously allowed it to offer competitive products, and with one of the largest R&D centres in India and the country’s robust IT capabilities, Ford is well-prepared to execute its new battery electric vehicle (BEV) strategy.
Ford’s commitment to BEVs aligns with its broader global sustainability goals, targeting carbon neutrality by 2050 for its vehicles, operations, and supply chain. The company aims to electrify its vehicle lineup fully, reduce manufacturing emissions, and shift to renewable energy sources across all facilities by 2035, ensuring that suppliers adhere to strict environmental standards.
In terms of employment, Ford currently employs 12,000 individuals in its Global Business Operations in Tamil Nadu, with plans to expand its workforce by 2,500 to 3,000 over the next three years. This significant presence underscores Ford’s commitment to the Indian market and its strategic role in both the local economy and global export markets.
Despite prioritising exports initially, Ford’s long-term strategy includes launching BEVs in the Indian market, which is projected to be among the fastest-growing markets for EVs globally. This strategic approach—building a solid production base and supply chain before tackling the domestic market—aims to prevent past pitfalls and position Ford to offer competitive, high-quality BEVs to both global and Indian consumers.
As Ford gears up for this new phase in India, its strategy reflects the evolving dynamics of the automotive industry and underscores the increasing significance of electric vehicles. If successfully implemented, Ford’s re-entry into India could herald a transformative era for both the company and the broader EV landscape in the country.
