Ford Motor Co is set to invest approximately Rs 32.5 billion ($370 million) in India to produce new high-end engines at its Maraimalai Nagar manufacturing site in Tamil Nadu. This move marks a bold return to local manufacturing after a four-year hiatus and signals renewed optimism for India as a manufacturing hub. The engines, which will have an annual capacity of over 200,000 units, are intended for export markets, although the destination countries remain unclear.

This investment, which is expected to be officially announced, comes amidst a backdrop of rising political tensions between New Delhi and Washington, with former US President Donald Trump having imposed a 50 per cent tariff on Indian imports earlier this year and criticised India's purchase of Russian oil. Despite this, Ford’s decision to retool its Tamil Nadu facility reflects confidence in India’s manufacturing capabilities, as the automaker prepares to meet demand for advanced engine technologies.

Ford first set up its manufacturing base in India in 1995, expanding with a second plant in Sanand, Gujarat, in 2015. However, under CEO Jim Farley’s leadership, Ford withdrew from the Indian market in 2021, citing substantial financial losses exceeding $2 billion. The company’s exit included the sale of its Sanand plant to Tata Motors, which now focuses on electric vehicle production.

In contrast to its previous strategy, Ford’s latest investment is focused on expanding its global manufacturing footprint, demonstrating a shift away from its earlier pivot toward electric vehicles. The decision comes as other US-based companies, including Apple Inc, have increased their manufacturing presence in India, despite the political challenges.

Tamil Nadu, where Ford is revitalising its old plant, is one of India's largest industrial hubs, home to manufacturing facilities from other global automakers such as Hyundai, Renault, and BMW. The region continues to play a pivotal role in India’s automotive and industrial sector.

Ford has yet to comment officially on the investment. However, the move underscores the company’s strategic shift and renewed focus on India as a key player in its global manufacturing network.

(Source: Business Standard)