April 20, 2024
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Ford abandons plan to sell Tamil Nadu plant to Sajjan Jindal-led JSW

In September 2021, Ford Motor Co announced its withdrawal from the Indian market, including plans to sell its sole manufacturing facility in Tamil Nadu. Recent reports suggest that Ford has now abandoned the sale of the Chennai plant, sparking speculation about a potential re-entry into the Indian market. A Ford spokesperson mentioned that the company is exploring alternatives for the manufacturing facility in Chennai but did not provide further details. The decision to exit India was prompted by significant losses compounded by the COVID-19-induced slowdown in the passenger vehicle market.

JSW Group, led by Sajjan Jindal, had earlier finalized a deal to acquire a 35% stake in a joint venture with SAIC, which operates MG Motors India. The plan included the purchase of Ford’s Chennai plant for approximately $100 million. However, Ford unexpectedly called off the deal, signaling a shift in its stance on selling the factory. The Chennai plant, with a 350-acre spread and an annual capacity of 150,000 cars and nearly 340,000 engines, has been non-operational since July 2022. JSW’s intended entry into the electric vehicle (EV) market was linked to the acquisition of this plant.

While Ford’s Sanand plant in Gujarat was successfully acquired by Tata Motors’ subsidiary Tata Passenger Electric Mobility in January for Rs 725.7 crore, with plans to enhance electric vehicle production, Ford faced cumulative operating losses of over $2 billion in the Indian market over a decade. Despite this, the Indian auto market has experienced a significant revival post-pandemic.

 

Picture Courtesy: Google/images are subject to copyright

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