Ford Contemplates Re-Entry into Indian Market with New Strategy

US automobile giant Ford is reportedly considering a return to the Indian market after its exit in 2021. The carmaker’s new proposal, which includes significant investments and a focus on electric vehicles and sustainability, signals a potential comeback.

According to a report by the Times of India, Ford has prepared a feasibility study on re-entering India, which will be reviewed at its headquarters. The move comes as the company seeks to tap into the growth potential of the Indian market, especially given the underperformance of its businesses in China and Europe.

Ford had a significant presence in India for nearly three decades, from 1995 to 2021, during which it invested over $2 billion and introduced popular models like the EcoSport mini-SUV and the Figo. The brand still enjoys recognition among Indian consumers, which could facilitate its re-entry.

India currently ranks as the third-largest vehicle market globally, following China and the US. A source familiar with the matter emphasized the strategic importance of India, stating, “It is not right to stay out of India, especially as the brand is still well-known to potential buyers.”

Ford’s reconsideration of its exit became evident in late 2023 when it reversed a decision to sell its Chennai factory to the JSW Group. The Maraimalai Nagar factory, spread over 350 acres, had an annual production capacity of around 200,000 vehicles and 340,000 engines.

Projections from S&P Global Mobility indicate that India is poised to lead global light vehicle production with a compound annual growth rate (CAGR) of 4.6% from 2023 to 2033. This growth rate surpasses China’s 1.7% CAGR and the US’s 0.3% CAGR during the same period.

Ford’s potential re-entry into India reflects its strategic pivot towards markets with high growth potential, aligning with its broader goals of sustainability and electric vehicle expansion.