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Ford's U-Turn: Retains Tamil Nadu plant amidst JSW Deal
Industry News- Dec 20,23
This decision comes after finalising a deal with the JSW Group led by Sajjan Jindal, sparking speculation that Ford may be contemplating a re-entry into the world's third-largest auto market.
Ford Motor Co has unexpectedly abandoned its plans to sell its Tamil Nadu plant, the company's sole remaining factory site in India. This decision comes after finalising a deal with the JSW Group led by Sajjan Jindal, sparking speculation that Ford may be contemplating a re-entry into the world's third-largest auto market, from which it exited over two years ago.
A spokesperson for Ford India stated in an email, "We continue to explore alternatives for our manufacturing facility in Chennai and have nothing further to share." JSW declined to comment on the matter.
The Maraimalai Nagar-based plant, which had been on the market since Ford's departure from India due to mounting losses and the impact of the Covid-19 pandemic on the passenger vehicle market in September 2021, was set to be acquired by JSW for approximately $100 million. However, earlier this month, Ford cancelled the deal and is no longer looking to sell the factory, according to sources familiar with the discussions. SAIC, which operates MG Motors India, recently announced the purchase of a 35% stake in a joint venture with JSW.
Other companies, such as Vietnamese e-carmaker VinFast and Mahindra and Mahindra, had expressed interest in the Ford plant. Still, Ford's unexpected decision to retain the facility has shifted the dynamics of the competition.
Strategically located near Chennai port and spanning 350 acres, the Ford plant has an annual capacity of 150,000 cars and nearly 340,000 engines. It has been inactive since July 2022.
In January, Tata Motors acquired Ford's Sanand plant in Gujarat to boost electric vehicle (EV) production. Ford, in its September 2021 announcement, had framed its departure as a restructuring to deliver long-term sustainability and profitability, retaining its engine-making and technology services businesses.
The Indian auto market has experienced a sharp revival since the end of the pandemic, with record-level sales. The shuttered Ford Chennai plant was intended to facilitate JSW's entry into EVs, aligning with Jindal's longstanding aspiration in this direction.
Ford India achieved profits of Rs 505 crore in FY23, driven by vehicle and engine exports before finally closing its vehicle-making operations in the country. The rapid growth of the EV segment in India has led global automakers, including Ford, to re-evaluate their outlook for both electric and internal combustion engine vehicles in the country.
In October, Ford Motor Co appointed India-born Kumar Galhotra as COO, signalling a strategic focus on the Indian market. Galhotra, reporting to the company's president and CEO Jim Farley, brings extensive experience from his previous roles within the company.
Source: Economic Times
Ford
Tamil Nadu plant
JSW Group
VinFast
Mahindra and Mahindra
Tata Motors
Kumar Galhotra
Sajjan Jindal
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