Ford to make India comeback: A glimpse at its history here

Ford Motor Company recently declared its plan to restart production at its Chennai plant in Tamil Nadu, India, two years after stopping production in the country. This comes as a strategy as the US automaker looks forward to regaining a market share in one of the largest car markets globally.

It also announced that the Chennai plant that was shut down for production of vehicles will now be used to assemble vehicles for export only. However, it is not clear which models the plant will manufacture. The Chennai plant had been manufacturing cars and engines in the past, Last year, it manufactured cars, but not engines.

What is Ford's history in India?

Ford motor Company established its operation in the Indian automobile market in the year 1995 through a Joint venture called Mahindra Ford India Limited. The identified business intention was to capitalize on the increasing market demand for automobiles in India. Ford entered the Indian market in 1998 with a model named Escort which was popular for its performance and structured framework. Two years later, in 1995, a fully-owned subsidiary was formed, called Ford India Private Limited, which signaled the deviation from the joint venture format.

The EcoSport, unveiled in 2010 received many accolades and benefited Ford’s operations in India. However, the company was compelled to work under intense competition from other Indian and Asian companies. It experienced some challenges such as low sales and high competitions among others. The company then had to cut production of several models and changed its strategy fundamentally.

Ford Motor Company made the strategic exit from the Indian market at the beginning of 2021 after experiencing numerous headwinds that include; Ford has struggled to expand its sales volumes while the field has remained highly competitive especially from Asian manufacturers. Finally, in 2022, the company stopped manufacturing export car from its Indian manufacturing division which indicated its exit from the market of the same year. However, they persisted with engine manufacturing at its plant in Gujarat, but limiting it to exports only.

The planned revival of the Chennai plant is seen as a plan to re-enter the Indian vehicle market even though at the current, Ford mainly focuses on exporting vehicles instead of selling in the domestic market. It captures the continued strategy of the company of deploying the existing structures and exploiting the international markets in light of a frosty environment in India.