Ford to Restart India Plant, Defying Trump’s Domestic Agenda
Automaker to Produce Export Engines in Tamil Nadu Facility
Key Takeaways:
- Ford Motor Co. plans to invest about 32.50 billion rupees ($370 million) to restart its Maraimalai Nagar plant in Tamil Nadu to produce high-end export engines.
- The move marks Ford’s return to Indian manufacturing four years after exiting the market and follows months of preparation amid U.S.-India trade tensions.
- An announcement could come this week as Ford shifts focus from electric vehicles and renews confidence in India as a global production base.
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Ford Motor Co. plans to invest about 32.50 billion rupees ($370 million) in India to churn out new engines, a person familiar with the matter said, as the U.S. carmaker resuscitates a factory itÌýshut downÌýfour years ago.
The Maraimalai Nagar manufacturing site in the southern Indian state of Tamil Nadu will be retooled to make high-end engines for export markets with an annual capacity of over 200,000 units, said the person, asking not to be named as the plans are private. The engines will not be exported to the U.S., but it’s unclear which countries they will be sent to, the person said, adding an announcement is expected as early as this week.
The U.S. automaker, which first signaled its interest in resuming local production in IndiaÌýa year ago, has been preparing the investment for months against a backdrop of heightened tensions between New Delhi and Washington. U.S. President Donald Trump placed a 50% tariff on Indian imports earlier this year in aÌýtrade standoff, and has lashed out at the Asian country’s purchase of Russian oil.Ìý
The move comes even as Trump made boosting manufacturing in the U.S. — especially where the automotive industry is concerned — a signature policy goal. FordÌýcaught flackÌýfrom the president during his first term for a plan to increase output outside the U.S., but more recently won praise from him after announcingÌýmajor investmentsÌýat its domestic plants.Ìý
Ford declined to comment.Ìý
Ford’s decision reflects renewed confidence in India as a manufacturing base from CEO Jim Farley and comes as itÌýpivotsÌýfrom a previous focus on electric vehicles. The Dearborn, Mich.-based company first set up manufacturing near Chennai in 1995 and added a second plant in Sanand, Gujarat, in 2015.Ìý
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Shortly after becoming CEO in 2020, FarleyÌýpulled the plugÌýon a deal with Mahindra & Mahindra Ltd. that would have kept Ford vehicles on Indian roads. He abandoned the market altogether less than a year later,ÌýsayingÌýit could no longer pour capital into marginal markets like India and Brazil that provided little or no return.Ìý
By the time it exited, Ford racked up losses totaling over $2 billion. It ultimately sold off the Sanand vehicle plant to Tata Motors, which now builds EVs there. In 2020, Ford’s chief U.S. rival, General Motors Co., also ceasedÌýproductionÌýin India, three years after shifting to an export-only business model.Ìý
More recently, other U.S. companies have been building up their manufacturing presence in India, despite the political tension. Trump singled out Apple Inc. in May for its decision to manufacture in India, but the tech giant has sinceÌýramped upÌýiPhone production across five Indian factories.
Tamil Nadu, where Ford plans to restart its old facility, is one of India’s largest industrialized states and a longtime automaking hub. It’s home to manufacturing facilities operated by Hyundai Motor Co., Renault SA, and BMW AG.
