Ford is set to resume manufacturing in southern India, two years after halting operations, reflecting the country’s growing importance as both a manufacturing hub and consumer market amid rising competition in the global auto industry.
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The company said in a statement last week that it intends to repurpose its plant in Tamil Nadu’s capital, Chennai, to primarily export to global markets. Ford previously built cars and engines at the factory for domestic and global markets.
Ford did not give further details about what it plans to manufacture in India, but analysts believe the company will eventually pivot to domestic car sales in addition to exports due to India being the third-largest automobile market globally, following China and the US.
“Everybody wants to have a China plus one strategy,” said Som Kapoor, partner automotives at global consultancy EY India. “At the end of the day, … the growth in the auto industry here will attract them.”
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Chennai, where Ford has a factory, is often called the Detroit of India because it is home to several big motor companies, including BMW and Hyundai, as well as domestic companies Ashol Leyland and TVS.