Ford to invest ₹3,250 crore at Chennai plant to produce new generation engines

American automaker Ford on Friday said it will invest Rs 3,250 crore at its Chennai plant to produce new generation engines.

The automaker, which exited the Indian market in 2021, said it has signed a memorandum of understanding with the government of Tamil Nadu outlining its "strategic direction that leverages India's manufacturing expertise as part of the Ford+ plan".

Following site preparation and investment in the project that will begin later this year, the Chennai plant will have planned capacity of 2.35 lakh engines annually, with production expected in 2029, Ford said in a statement.

"With an initial expected investment of Rs 3,250 crore, the project is expected to create more than 600 jobs, plus indirect jobs across the industry," it added.

"We are pleased to advance our plans and confirm the Chennai plant's vital role in Ford's manufacturing network," Ford Motor Company president, International Markets Group Jeff Marentic said.

He further said, "This decision reinforces our commitment to leveraging India's manufacturing prowess for future products."

Ford said the engine lineup planned for production in Chennai will feature all-new technology. Specific details about the engine type and export markets will be shared closer to the start of production, it added.

Tamil Nadu Industries Minister T R B Rajaa said Ford's decision to commence manufacturing in Chennai will further energise the resurgent automotive sector of the state.

Besides this manufacturing presence, Ford said it currently employs approximately 12,000 people in its Global Business Operations in Tamil Nadu.

The company, which had in 2021 announced stoppage of manufacturing vehicles in India, last year submitted a Letter of Intent (LOI) to the government of Tamil Nadu, confirming its intention to utilise the Chennai plant for manufacturing for exports.

In September 2021, after nearly three decades of struggling to make a mark in India, Ford Motor Co had announced that it would stop vehicle production at its two plants in the country and will sell only imported vehicles going ahead as part of a restructuring exercise.

While the company sold its vehicle manufacturing plant at Sanand in Gujarat to Tata Motors, it could not wind down its vehicle and engine manufacturing in Chennai by the targeted timeline of second quarter of 2022.