Ford To Invest Rs 32.5 Billion in Chennai Engine Plant

04 Nov 2025 CW Team

The move follows a letter of intent signed in September 2024, now formalised through a memorandum of understanding (MoU) between Ford representatives and the Tamil Nadu Government. Senior company executives met Chief Minister M.K. Stalin on Friday to outline a roadmap for leveraging India’s manufacturing strength to serve Southeast Asian markets.

“We are pleased to advance our plans and confirm the Chennai plant’s vital role in Ford’s manufacturing network,” said Jeff Marentic, President of Ford’s International Markets Group. He added that the decision “reinforces our commitment to leveraging India’s manufacturing prowess for future products.”

Ford, which sold its Sanand vehicle factory to Tata Motors in 2022, continues to operate its engine plant there for export markets. The new MoU aligns with Ford’s broader global strategy to optimise production and strengthen export capabilities.

Tamil Nadu Industries Minister T.R.B. Rajaa welcomed the announcement, describing it as a boost to the state’s resurgent automotive sector. “It speaks volumes about Tamil Nadu’s strong manufacturing ecosystem, highly skilled workforce, and proactive investor facilitation,” he said.

The Maraimalai Nagar plant, located about 50 kilometres from Chennai Port and 74 kilometres from Ennore Port, offers excellent logistical advantages, making it an ideal export base. The site is also within 320 kilometres of Bengaluru, further enhancing supply chain connectivity.

This marks Ford’s return to manufacturing in Chennai after a two-year hiatus; the company had halted production at the same facility in August 2022 amid losses of around $2 billion over a decade and a market share of less than 2 per cent through models such as the EcoSport and Endeavour SUVs.

Minister Rajaa added, “This is not just a restart of manufacturing at Ford’s facility, but a step into the future of the automotive industry through next-generation engine production. The state remains committed to supporting Ford’s operations here.”

The new investment is expected to create over 600 direct jobs, along with significant indirect employment across the automotive supply chain. Ford currently employs about 12,000 people in its global business operations unit based in Tamil Nadu.

Ford continues to serve over one million customers in India through its service, aftermarket parts, and warranty support network. The shutdown of the Maraimalai Nagar plant in 2022 had reportedly cost Rs 12.96 billion in severance benefits for 2,592 employees.

With the new investment, Ford aims to reposition India as a key manufacturing and export hub, driven by technology, sustainability, and advanced engineering.

American automaker Ford has announced an investment of about Rs 32.5 billion to manufacture next-generation powertrains at its Chennai plant, marking a major return to production in India. The company plans to use its Maraimalai Nagar facility, on the outskirts of Chennai, as an export hub with an annual capacity of 235,000 units, with production expected to begin in 2029. The move follows a letter of intent signed in September 2024, now formalised through a memorandum of understanding (MoU) between Ford representatives and the Tamil Nadu Government. Senior company executives met Chief Minister M.K. Stalin on Friday to outline a roadmap for leveraging India’s manufacturing strength to serve Southeast Asian markets. “We are pleased to advance our plans and confirm the Chennai plant’s vital role in Ford’s manufacturing network,” said Jeff Marentic, President of Ford’s International Markets Group. He added that the decision “reinforces our commitment to leveraging India’s manufacturing prowess for future products.” Ford, which sold its Sanand vehicle factory to Tata Motors in 2022, continues to operate its engine plant there for export markets. The new MoU aligns with Ford’s broader global strategy to optimise production and strengthen export capabilities. Tamil Nadu Industries Minister T.R.B. Rajaa welcomed the announcement, describing it as a boost to the state’s resurgent automotive sector. “It speaks volumes about Tamil Nadu’s strong manufacturing ecosystem, highly skilled workforce, and proactive investor facilitation,” he said. The Maraimalai Nagar plant, located about 50 kilometres from Chennai Port and 74 kilometres from Ennore Port, offers excellent logistical advantages, making it an ideal export base. The site is also within 320 kilometres of Bengaluru, further enhancing supply chain connectivity. This marks Ford’s return to manufacturing in Chennai after a two-year hiatus; the company had halted production at the same facility in August 2022 amid losses of around $2 billion over a decade and a market share of less than 2 per cent through models such as the EcoSport and Endeavour SUVs. Minister Rajaa added, “This is not just a restart of manufacturing at Ford’s facility, but a step into the future of the automotive industry through next-generation engine production. The state remains committed to supporting Ford’s operations here.” The new investment is expected to create over 600 direct jobs, along with significant indirect employment across the automotive supply chain. Ford currently employs about 12,000 people in its global business operations unit based in Tamil Nadu. Ford continues to serve over one million customers in India through its service, aftermarket parts, and warranty support network. The shutdown of the Maraimalai Nagar plant in 2022 had reportedly cost Rs 12.96 billion in severance benefits for 2,592 employees. With the new investment, Ford aims to reposition India as a key manufacturing and export hub, driven by technology, sustainability, and advanced engineering.

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