The Maraimalai Nagar manufacturing site in the southern Indian state of Tamil Nadu will be converted to make high-end engines for export markets with an annual capacity of more than 200,000 units, said the person, who asked not to be named because the plans are private. The bikes will not be exported to the U.S., but it is unclear which countries they will be shipped to, the person said, with an announcement expected as soon as this week.
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The American carmaker, which first expressed its interest in resuming local production in India a year ago, has been preparing the investment for months against a backdrop of heightened tensions between New Delhi and Washington. US President Donald Trump imposed a 50% tariff on Indian imports earlier this year in a trade dispute and has lashed out at the Asian country’s purchases of Russian oil.
The move comes at a time when Trump made boosting US manufacturing – especially when it comes to the auto industry – a signature policy goal. Ford was criticized by the president during his first term for a plan to increase production outside the US, but recently won praise from him after announcing major investments in its domestic factories.
Ford declined to comment. Ford’s decision reflects Chief Executive Officer Jim Farley’s renewed confidence in India as a manufacturing base and follows an earlier focus on electric vehicles. The Dearborn, Michigan-based company first set up production near Chennai in 1995 and added a second factory in Sanand, Gujarat in 2015. Also read| Nissan CEO Ivan Espinosa is conducting a global overhaul and betting big on India
Shortly after becoming CEO in 2020, Farley pulled the plug on a deal with Mahindra & Mahindra Ltd. which would have kept Ford vehicles on Indian roads. Less than a year later, he left the market altogether, saying it could no longer pour capital into marginal markets such as India and Brazil, which provided little or no returns.
By the time the company left, Ford had suffered losses totaling more than $2 billion. It eventually sold the car plant in Sanand to Tata Motors, which now builds electric cars there. In 2020, Ford’s main U.S. rival General Motors Co. also halted production in India, three years after switching to an export-only business model.
More recently, other US companies have built up their industrial presence in India despite political tensions. Trump mentioned Apple Inc. in May over its decision to start manufacturing in India, but the tech giant has since ramped up iPhone production at five Indian factories.
Tamil Nadu, where Ford plans to restart its old plant, is one of India’s largest industrialized states and has been a hub for car manufacturing for years. It is home to production facilities of Hyundai Motor Co., Renault SA and BMW AG.
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