Ford to invest $370 million in Tamil Nadu despite Trump’s local push: Report
Ford Motor Co. plans to invest about 32.50 billion rupees ($370 million) to make new engines in India, a person familiar with the matter said, signaling renewed confidence in the country and challenging Donald Trump’s support for American manufacturing while reopening a factory that was closed four years ago.
The Maraimalai Nagar production facility in India’s southern state of Tamil Nadu will be retooled to produce high-end engines for export markets with an annual capacity of over 200,000 units, said the person, who asked not to be named because the plans are private.
The engine will not be exported to the USA, but it is unclear which countries they will be sent to, the person said, adding that an announcement is expected as early as this week.
The US automaker, which first signaled its interest in restarting local production in India a year ago, has been preparing for the investment for months despite the increasing tension between New Delhi and Washington. Trump earlier this year imposed a 50% tariff on Indian imports in a trade impasse and lashed out at the Asian nation’s purchase of Russian oil.
This move comes despite Trump making it a policy goal to increase production in the US (especially when it comes to the auto industry). Ford drew ire from the president during his first term for a plan to expand production outside the U.S., but recently won praise from him after announcing major investments in its domestic facilities.
Ford declined to comment.
Ford’s decision reflects Chief Executive Jim Farley’s renewed confidence in India as a manufacturing base and comes as a result of its previous focus on electric vehicles. The Dearborn, Michigan-based company first started production near Chennai in 1995 and added a second factory in Sanand, Gujarat, in 2015.
Shortly after Farley became CEO in 2020, Mahindra & Mahindra Ltd. It pulled the plug on a deal with Ford that would keep Ford vehicles on Indian roads. Less than a year later he abandoned the market altogether, saying it could no longer pour capital into marginal markets that yield little or no returns, such as India and Brazil.
When it came out, Ford totaled losses exceeding $2 billion. He eventually sold the Sanand vehicle factory to Tata Motors, which now produces electric vehicles there. In 2020, Ford’s chief rival in the US, General Motors Co. It also stopped production in India three years after switching to an export-only business model.
Recently, other US companies have also been increasing their manufacturing presence in India despite political tensions. Trump singled out Apple Inc. for its decision to manufacture in India in May, but the tech giant has since increased iPhone production at five factories in India.
Tamil Nadu, where Ford plans to restart its old plant, is one of India’s largest industrialized states and has long been an auto manufacturing hub. It hosts production facilities operated by Hyundai Motor Co., Renault SA and BMW AG.
–With help from Keith Naughton.
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