Ford Motor Company has announced plans to invest approximately $370 million (£290 million) in India to establish a new engine manufacturing programme, marking a significant return to industrial operations in the country four years after halting vehicle production. The US-based carmaker confirmed on Friday that its Chennai manufacturing facility, located in the southern state of Tamil Nadu, will be retooled to produce a new generation of high-end engines for export markets. The plant, which will feature advanced manufacturing technology, is expected to have an annual capacity exceeding 235,000 units once operational. Production is scheduled to commence in 2029 and is projected to generate around 600 new jobs.
Ford currently employs around 12,000 people in Tamil Nadu, the company said. The news was first reported by Bloomberg, which cited sources familiar with the matter, noting that the engines produced in Chennai will not be exported to the United States. Ford originally established its Indian manufacturing base near Chennai in 1995, later expanding with a second facility in Sanand, Gujarat, in 2015. However, the company ceased vehicle production in India in 2021, citing years of financial losses exceeding $2 billion and a strategic decision to withdraw from unprofitable markets. The Sanand plant was subsequently sold to Tata Motors, which now produces electric vehicles there.
The decision to refurbish the Maraimalai Nagar site near Chennai signals Ford’s renewed interest in India’s manufacturing capabilities, despite an increasingly complex geopolitical backdrop. Relations between Washington and New Delhi have been strained in recent months, particularly after US President Donald Trump imposed a 50% tariff on Indian imports amid a broader trade dispute and criticised India’s continued purchases of Russian oil. Trump has long urged American companies to boost domestic production and has in the past publicly rebuked Ford for expanding operations overseas before later commending some of its investments within the United States.
Tamil Nadu is one of India’s most important automotive hubs, hosting facilities operated by global manufacturers including Hyundai, Renault and BMW. The state’s well-developed industrial infrastructure and skilled workforce have helped it attract sustained foreign investment in the automotive sector.
