Ford Motor has begun preparatory work to restart the first phase of operations at its Chennai plant, Tamil Nadu Industries minister TRB Rajaa said on Wednesday. “There was some slowdown (in the process) due to the regime change in the US, but now things are back on track,” Rajaa said.
He added that the US auto major finalised the components to be manufactured from the Chennai facility a few weeks ago and is currently carrying out the preparatory work to move forward. However, he did not confirm whether Ford would resume full vehicle manufacturing as originally planned or limit operations to engines and components for export. “Ford is certainly coming,” a senior government official said, adding that manufacturing operations may resume in the second half of 2025.
The latest update comes amid prolonged uncertainty around Ford’s India re-entry, which was cast into doubt following US President Donald Trump’s aggressive tariff stance aimed at bringing back manufacturing jobs to America.
In September 2024, Ford signed a Letter of Intent (LoI) with the Tamil Nadu government to restart vehicle production at its Maraimalai Nagar plant, with a focus on exports. Despite the formal commitment, there had been little progress on the ground even six months after the LoI, prompting speculation that the company was shelving its plan to manufacture cars in India. Subsequent reports indicated that Ford was considering repurposing the plant to produce engines and related components for global markets instead.
Even that limited plan faced headwinds after the Trump administration imposed a steep 25% tariff on imported cars and auto parts—including engines, transmission systems, and gears—raising doubts over the viability of using India as an export hub.
However, in a significant policy shift, President Trump on Tuesday signed executive orders that partially ease the impact of the tariffs. While the 25% levy will remain, the administration will now offer a 15% rebate to automakers who finish their vehicles domestically—effectively lowering the burden for companies willing to localise final assembly in the US.
Ford exited vehicle manufacturing in India in September 2021 as part of its global restructuring strategy, shutting down the 350-acre Maraimalai Nagar facility in Chennai. The plant had a peak annual capacity of 150,000 cars and 340,000 engines. While production at the Chennai facility ceased, Ford continued to manufacture engines for export from its Sanand facility in Gujarat, which it sold to Tata Motors in 2023 but later leased back to continue limited operations.