New-look Chennai town to welcome Ford on its India comeback trail

The Chennai unit of Ford, spread across an area of 350 acres, had an annual production capacity of around 200,000 vehicles and 340,000 engines

Henry Ford Road in Maraimalai Nagar, located about 50 kilometres from Chennai, has remained quiet for the past two years since the Ford India plant ceased operations in 2022. However, on Saturday, an outsider could sense a feeling of rejuvenation in the air following the company’s announcement of its reopening plans.

While Ford remains the same company, Maraimalai Nagar has changed over the past two years.

Once a less-developed area on the outskirts of Chennai, it now features eight-lane roads, hotels, and cafés where there were previously only a few tea stalls. Major retail chains like Pantaloons and Trends, as well as fast-food chains such as KFC, Burger King, and McDonald’s, have opened their outlets within a three-to-five-kilometre radius. Ford will be returning to a transformed Maraimalai Nagar, which now feels like an extension of Chennai.

From the outside, one can see housekeeping staff working at a rapid pace, likely preparing for the company’s grand comeback. Security has instructed against photographing the workers inside, saying, “Only the announcement has been made. It will take at least six more months for operations to resume.”

On Friday, Ford Motor Company announced plans to restart manufacturing at this factory for exports, marking the automaker’s return to the Indian market after its exit announcement in September 2021.

Raja Hussain, who works at a new café opposite the Ford unit, remembers the busy days when the manufacturing plant was at its peak. At that time, Hussain worked at what was the only tea stall at Ford Bus Stop. Now, at least 15-20 shops are doing various businesses at Ford Bus Stop. “Workers used to come to our shop in the evening. It was a place for serious political discussions, even gossip. Now, the area is silent,” Hussain says.

Mohammad Iqbal, another worker at a nearby juice shop, expressed confidence that their sales will increase.

“We expect sales to double. Ford Bus Stop may soon expand to Ford City,” Mohammad Iqbal says.

The only other manufacturing unit on Henry Ford Road is Hanon Systems, a full-line supplier of automotive thermal and energy management solutions for electrified and conventional vehicles. Workers at this unit still bring some life to the otherwise quiet road.

The Chennai unit of Ford, spread across 350 acres, had an annual production capacity of around 200,000 vehicles and 340,000 engines. Maraimalai Nagar is considered a lucrative location due to its proximity — 50 kilometres from Chennai port and 74 kilometres from Ennore port.

The site, which previously manufactured the Ford EcoSport and Ford Endeavour, saw investments of around $1 billion and used to export cars to about 37 countries.

“We are happy that Ford is coming back. We expect that the company will make use of the expertise that workers like us had," said Arun S, a former worker at the factory’s body shop and the former leader of the Chennai Ford Workers Union.

With the factory’s closure, the union also became inactive.

On the other hand, dealers are optimistic about the development.

An erstwhile Ford dealer, who now operates dealerships for both two-wheeler and four-wheeler original equipment manufacturers in Karnataka, said that if the company decides to re-enter the Indian market, they would be open to partnering. “The company has always been good with its dealers,” he said, adding that no discussions have yet been initiated regarding any re-entry plan.

Dealer sources observed that when Ford entered the Indian market, it was primarily a small-car market, prompting the introduction of models like the Figo. Now, India is more of a sport utility vehicle (SUV) market, though it remains price-conscious.

“If Ford returns, the models would have to be carefully chosen. US carmakers are used to making large cars; India still favours compact SUVs,” the source said.

Ford, however, has kept the door open for a re-entry. An example of this is the favourable deal it offered its dealerships. “When the company announced its exit, the 265 dealers in India had 7,000-8,000 cars in inventory. The company assisted dealers financially to liquidate the stocks, produced enough spare parts to last for the next 10 years, and stored them in warehouses funded by Ford,” explained a former Ford dealer.

He added that the company calculated the loss each dealer would incur from shutting down the dealership, and provided compensation for the next five years to cover these losses, including a depreciation component. The company also calculated the drop in service load for the coming years and compensated dealers accordingly.

“It has ensured that the standards and the experience are not diluted for the customer,” said a dealership owner who runs dealerships for another 16 automotive brands. He mentioned that the company has left the door open for re-entry, and all former dealers would be eager to onboard if and when that happens.

Ford remains true to its roots, while Maraimalai Nagar has undergone a remarkable transformation. Now, with its fresh vibrancy and renewed energy, Maraimalai Nagar stands poised and ready to embrace the return of the all-American icon with open arms.