Last year, Ford India sent shockwaves around the Indian automotive sector after it decided to stop making cars in India, taking a hit of almost $2 billion. The company decided to shut two of its manufacturing plants in Chennai, Tamil Nadu, and Sanand, Gujarat. However, the company explained its exit due to some operational issues, not because they do not see a future in the country.
This is the second American automaker to be exiting the country within four years as one of America’s largest auto companies. General Motors decided to quit its India Operations in 2017 after it failed to make an impact in the Indian market.
Although making a surprise comeback, Ford has decided to have another go at one of the largest Asian Auto markets. This time making a change in its India strategy, it promises a new segment for Ford Lovers in India. In addition, the company is considering producing electric vehicles in India.
What is the timeline provided by Ford to start its operation again in India?
For now, no timeline has been presented by the company. Although, it is holding talks with the government in Tamil Nadu and exploring its options to convert its manufacturing plant into an electric vehicle plant from which it can even start exporting. In an interview with Economic Times, Ford said it is “exploring the possibility of using a plant in India as an export base.”
In February, the government of India decided to announce a Production-Linked Incentive Scheme for the Indian Auto sector. Out of the 20 companies that got selected, one name that stood out and surprised everyone was Ford India. Despite the company shutting down its business, it still made it to the list. The company spokesperson was quick to put down any speculation and said, “We thank the Government of India for approving Ford’s proposal under the Production-Linked Incentive (PLI) scheme for the automobile sector. As Ford leads customers through the global electric-vehicle revolution, we’re exploring the possibility of using a plant in India as an export base for EV manufacturing. We don’t have anything additional to announce at this time.”
What is Ford’s strategy for the Electric Vehicle segment?
The company aggressively invested in the EV sector and announced spending $50 Billion until 2026 after it previously wanted to invest $30 billion by 2025. After witnessing the growing demand for Electric vehicles worldwide and India being the fifth largest Automobile market, Ford does not want to miss out on this opportunity.
The automaker aims to ramp up its EV segment with 2 million vehicles every year by 2026 and wants it to become half of Ford’s vehicle lineup by 2030. Ford will face tough challenges from other leading automakers like Tesla, already a leader in the EV segment globally, while local players like Tata Motors and Mahindra & Mahindra are already launching electric vehicle segments in the Indian market.