(Bloomberg) -- Ford Motor Co. plans to manufacture cars at its plant in southern India for exporting globally, three years after the carmaker said it will shut its factories in India.
The US carmaker has sent a so-called Letter of Intent to the Tamil Nadu state government, outlining its intention to use the factory in Chennai to make cars for the overseas markets, Kay Hart, president at International Markets Group said in a LinkedIn post Friday.
The carmaker has explored “different options,” Hart said in the post, adding that Ford will share more details in “due course.” India would be Ford’s second largest employee base worldwide, she said.
After shutting car factories in India in September 2021, laying off 4,000 employees and taking $2 billion in restructuring charges, Ford’s re-entry bolsters India’s efforts to position itself as a global carmaking hub. Global firms, meanwhile, are looking to diversify their manufacturing bases to hedge supply chain risks.
The announcement from Hart follows the Tamil Nadu’s chief minister M. K. Stalin’s post on X, formerly Twitter, earlier this week where he stated he “explored the feasibility of renewing Ford’s three decade partnership with Tamil Nadu.”
Earlier this year, the India’s federal government had announced it will lower import taxes if foreign carmakers pledge to invest $500 million in the country.
The automaker is also exploring a partnership with the JSW Group as it restarts the plant, local newspaper Mint reported on Friday.
The move to make cars in Chennai “underscores our ongoing commitment to India as we intend to leverage the manufacturing expertise available in Tamil Nadu to serve new global markets,” Hart said.
Ford currently employs 12,000 people in global business operations in Tamil Nadu, a number expected to grow by as much as 3,000 jobs within the next three years, Ford said in a statement.
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