According to Indian media reports, the American automotive giant Ford is re-evaluating the fate of its factory in Chennai, India. It is highly likely that it will not resume production but rather exit, which is another heavy blow to India's "Make in India" dream.

Let's first look at Ford's production situation in India. In fact, Ford entered India and set up a factory quite early. In 1996, Ford established factories in Sanand, Gujarat, and Chennai, Tamil Nadu. However, due to products that did not suit the Indian market, it was never able to open up the market. After operating for 25 years, Ford's share in India's passenger car market was less than 2%. From 2011 to 2021, Ford lost over $2 billion in India.

[Ford's Chennai factory is unlikely to resume operations]

Therefore, in September 2021, Ford India announced to shut down the Sanand factory first, and in 2022, it also closed the Chennai factory. To lay off approximately 4,000 workers and handle other legal procedures, Ford will have to spend an additional $2 billion on after-sales. Thus, India earned a total of $4 billion from Ford.

[Ford India factory once employed many locals]

American automakers such as General Motors and Harley-Davidson also struggled in the Indian market, ceasing production in India in 2017 and 2020 respectively, and significantly reducing their sales business. The main reason is that the American automotive concept does not match the needs of the Indian market. Low-cost small vehicles developed by Japanese Suzuki and South Korean Hyundai dominate the Indian market.

In fact, the problem of American cars being unsuitable in other markets is not limited to India. In the Chinese market, Ford cars are not doing too well either. Some models that were once popular have now been discontinued. So why doesn't Ford give up the Chinese market? Because here, it can still produce and sell some high-profit large vehicles, such as the Edge, F-150 Raptor, Mondeo, and Taurus. Ford has also launched a series of hybrid and fully electric models. In other words, Ford is willing to make adjustments and adapt for the Chinese market. Then why is it unwilling to make such efforts for the Indian market?

[The gates of the Ford factory in India are closed]

At the same time that Ford planned to abandon the Chennai factory, another news emerged. The export value of Apple phones from India from April to September 2025 reached $10 billion, an increase of 75% year-on-year, surpassing China for the first time to become the largest smartphone supplier to the United States.

Seeing this data, the Chinese feel a mix of emotions. A large number of Chinese mobile phone companies had previously believed in the investment promises of the Indian government, establishing a complete mobile phone supply chain in India, cultivating a powerful competitor. Moreover, Indian companies have even started to enter key components of mobile phones. If this process does not encounter major setbacks, the nationalization of the Indian mobile phone supply chain is imminent.

However, this has not happened in the automotive supply chain. Chinese new energy vehicle companies have encountered all sorts of obstacles when trying to enter the Indian market. The Chinese government has also timely intervened to prevent companies from transferring technology and production capacity to India.

As a result, foreign automobile companies find it difficult to localize in India due to the lack of industrial foundation. Elon Musk has been invited multiple times by the Indian government to examine the conditions for Tesla's sales and production. After careful consideration, the billionaire still gave up.

Therefore, Ford's decision to withdraw from India is directly related to China's industrial transfer policy. Since there is no supply chain here, it is better to go elsewhere.

So how is Ford planning to promote its research and production in the new energy era? Ford has already established the Nanjing R&D Center and the Shanghai Design Center in China, fully utilizing the strong supporting capabilities of China's new energy vehicle industry. Considering that the US-China tariff war is not yet resolved, Ford needs to find another region to establish an overseas R&D center.

According to reports, Ford has decided to invest hundreds of billions of dollars in Europe, including an electric vehicle plan in Cologne, Germany, and setting up parts manufacturing centers and high-density battery R&D institutions in the UK. Although Europe also faces problems with an incomplete new energy industry chain, it is certainly much better than India's basic situation. Moreover, from the perspective of local R&D capabilities in the automotive industry, Europe is not necessarily worse than the United States.

[Ford is also transitioning to new energy]

Ford's decision is a double blow for the Modi government. First, hundreds of billions of dollars in investments have left, thousands of manufacturing jobs are no longer possible, and the establishment of related supply chains has become a dream. More importantly, Ford is a traditional American financial group with deep ties to the political world. If Ford's factory can be revived, it would become a lever to repair Indo-US relations. Now, Ford is likely to leave India, and it is unknown how Modi's "Bharat Jyoti" (India's bright future) will narrate this story.

Original: https://www.toutiao.com/article/7560349546765713972/

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