Ford may come to India soon majorly focuses on Electric Car.
Ford returning to India?, the renowned US car manufacturer, is contemplating a return to the Indian market with a renewed focus on electric vehicles (EVs) and sustainability. This potential re-entry is currently under review by Ford’s global team, led by CEO Jim Farley. The team has prepared a detailed feasibility report to evaluate the prospects of re-entering India, a market deemed crucial for future growth, especially considering the stagnation in Western markets.
Ford’s history in India has been marked by significant investments, including over $2 billion spent on developing models like the EcoSport mini-SUV and the Figo small car. Despite these investments and historical partnerships, such as joint ventures with Mahindra & Mahindra, Ford struggled to establish a stable business in India. These challenges culminated in Ford’s decision to sell its Gujarat plant to Tata Motors and consider exiting the Indian market altogether.
Ford Returning to India?
The possibility of Ford Returning to India gained traction when Ford reconsidered a deal to sell its Chennai plant to Sajjan Jindal’s JSW. This plant had been a central hub for Ford’s operations in India. The global team’s decision to potentially retain the Chennai facility suggests its importance in Ford’s renewed strategy. Should Ford’s global team approve the re-entry plan, the company would need to undertake substantial legal preparations and update existing machinery at the Chennai plant. This process could delay production by approximately one year.
India’s evolving market conditions, particularly the new electric vehicle policy unveiled in March, are key factors influencing Ford’s reconsideration. The policy aims to transform India into a manufacturing hub for EVs by attracting global investments. It requires companies to invest at least Rs 4,150 crore (approximately USD 500 million) in EV manufacturing facilities, which must become operational within three years and meet domestic value addition benchmarks. Furthermore, the policy allows for the import of up to 8,000 completely built electric vehicles annually at a reduced customs duty of 15 percent.
This new policy aligns well with Ford returning to India potential strategy, providing a supportive environment for global carmakers to invest in and develop electric mobility solutions in India. If Ford decides to proceed with re-entry, the company’s focus will likely be on leveraging the new policy to establish a significant presence in the rapidly growing Indian EV market. This move could mark a new chapter in Ford’s history, aligning with global trends towards sustainable transportation and electric mobility.
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