Ford India considering to utilise the plant, re-entry in the Indian market possible
Ford India is reconsidering its decision to sell the Chennai plant, indicating a potential comeback to the Indian market. The American automaker recently called off a deal with the JSW group, sparking speculation about the future of its manufacturing facility in Maraimalai Nagar.
There is a speculation that Ford is actively exploring alternatives for the Chennai unit, opening the door to possibilities such as utilising the facility for exports or re-entering the Indian market. This development comes after talks with potential buyers, including the JSW group, Mahindra and Vietnamese electric vehicle maker Vinfast, failed to materialise into deals.
The JSW group had considered acquiring the Ford unit as part of its foray into the electric vehicle segment. Similarly, Vinfast, which earmarked $200 million for global expansion in India and Indonesia, was exploring options to establish a manufacturing unit in the country.
Industry insiders reveal that other key players such as Ola Electric, Hyundai Motor India, Tata Motors and MG Motor have engaged in multiple discussions with Ford India’s management over the past two years. Maraimalai Nagar, the location of the Chennai plant, is considered strategically advantageous due to its proximity to ports and major metropolitan areas.
An industrial source familiar with the supplier ecosystem notes that the shutdown of the Maraimalai Nagar factory had minimal impact on suppliers, as many were also serving other automotive giants like Maruti and Hyundai. The ownership of the land currently remains with Ford India, adding another layer of complexity to the ongoing discussions about the plant’s future.
Interestingly, the closure of the Maraimalai Nagar factory reportedly cost Ford’s India arm approximately Rs. 1296 crores in the form of a severance package for 2592 workers. The severance deal, negotiated between unions and the company, ranged from Rs. 34.5 lakhs to a maximum of Rs. 86.5 lakhs per employee.
Suresh S, the president of the former employees’ Union of Ford India, stated, “All the employees have opted for a severance package. We have not heard anything about the current development of a comeback from our sources.”
The Chennai unit, spanning 350 acres, had an annual production capacity of around 2,00,000 vehicles and 3,40,000 engines. Its strategic location, being only 50 km away from Chennai port and 74 km from Ennore port, makes it an attractive destination for investors. Additionally, its accessibility to Bengaluru, just 320 km away by road, adds to its appeal.
The uncertainty surrounding the Maraimalai Nagar plant began on 9th September, 2021, when Ford announced its phased withdrawal from India. Now, with the possibility of a comeback on the horizon, industry watchers eagerly await Ford’s next move and the impact it may have on the Indian automotive landscape.
If they decide to come back to the Indian market, what cars would you like to see in their new portfolio for India? Let us know in the comments section below.
