Story of U-turns: After re-considering India exit, Ford again decides to shut factories

NEW DELHI: After showing a surprising willingness to re-think its India exit plan, American auto major Ford did a swift U-turn in only three months, announcing that it’s giving up on the project to make electrics in the country (for exports) despite making the cut for benefits under the government’s prestigious production-linked incentive (PLI) scheme.
It is believed that the company is close to securing deals to sell its India factories – the first one at Chennai in Tamil Nadu and the second one at Sanand in Gujarat. Tata Motors, which has seen a strong resurgence in its India passenger vehicles business, is believed to be close to acquiring the Gujarat plant, while talks are on with a clutch of companies for Chennai, including with Ola, sources said.
The company, which in February this year had held out a hope to re-enter India after originally pulling out around the middle of 2021 (when it failed to secure a joint venture with local Mahindra & Mahindra), is understood to have informed its workers about the latest decision.

When contacted, a spokesperson for Ford in India said, “After careful review, we have decided to no longer pursue EV manufacturing for exports from any of the Indian plants. We remain grateful to the (Indian) government for approving our proposal under the Production-Linked Incentives and for being supportive while we continued our exploration.”
The spokesperson said that as part of the “ongoing business restructuring” in India, Ford had continued to “explore possible alternatives” for its manufacturing facilities, one of which had included applying for the PLI scheme that would have enabled it to utilize its plants as a potential EV manufacturing base.
The company said that as of now, its previously-announced “business restructuring continues as planned, including exploring other alternatives for our manufacturing facilities.”
“We continue to work closely with unions and other stakeholders to deliver an equitable and balanced plan to mitigate the impacts of restructuring,” the spokesperson said.
Sources said that the company found it daunting to have an export-oriented EV manufacturing set-up in India while being absent from the local market.
“Ford has had an unpleasant experience about India even previously, and they thought it would be wiser to not opt for local manufacturing in the market again. Selling the factories to those interested seemed to be a better option, especially as the plants are still in good condition when compared to the factory of General Motors in Maharashtra whose sale to China’s Great Wall Motors has been stuck due to diplomatic and border tensions between India and China,” one of the sources said.
Company officials said that while it is exiting local manufacturing plans, the customers of Ford will continue to get service and spares support in the market.

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