Ford India makes a comeback via EV route under PLI Scheme

Ford India makes a comeback via EV route under PLI Scheme after enthusiasts and owners of Ford had got a not-so-pleasant shock when the American automaker shut shop in India & ceased its sales operations back in September 2021. However, the silver lining comes as Ford has been picked among 20 carmakers under the ‘Champion OEM Incentive Scheme‘. This comes with an approved budgetary outlay of ₹25,938 crores as a part of the PLI Scheme.

Ford India was noted stating that Ford is thankful to the Government of India for approving its proposal under the Production-Linked Incentive (PLI) Scheme of the automobile sector. We are exploring the possibility of using a plant in India as an export base for EV manufacturing, as we lead customers through the global electric vehicle revolution. He added that he wouldn’t have any more details to share at the moment and remained tight-lipped about any further developments.

A statement from Mr. Kapil Sharma, Head of Communications & CSR

Ford India makes a comeback by Restructuring Operations

Mr. Anurag Mehrotra, former President & Managing Director of Ford India shared the details on the Restructuring of Ford Operations in India. He brought to light, the need for this restructuring as a response to the increasingly challenging market conditions including the extended slow down of India’s auto industry, as well as cumulative operating losses that Ford has incurred. The business change that has been announced is designed to create a new asset-like business model which is sustainably profitable in the long term.

In the time to come, Ford plans to shift from an existing set of locally produced products to a global portfolio. The sale of the current products such as Figo, Aspire, Freestyle, Ecosport & Endeavour will continue only when in inventory. As per the existing customers of Ford, Mr. Mehrotra assured that Ford shall remain committed to serving the customers with ongoing parts, service, & warranty support. Restructuring and transitioning will provide an opportunity to Ford to continue to serve its patrons with full commitment.

We are grateful to our dedicated team in India who have undertaken many actions in recent years in an attempt to position the company for profitability and growth. Our ability to refocus our presence in India is a result of their building our expertise in low-cost engineering, global engine manufacturing quality, and business services.

A quote from Steven Armstrong, Transformation Officer-South America, and India

As a plan of restructuring, Ford plans to serve Indian customers with some of the most iconic vehicles from the Ford portfolio such as Mustang Coupe & all-new hybrid & fully electric vehicles such as Mustang Mach-E. Ford has assured that it shall remain committed to serving the customers with ongoing parts, service, & warranty support. Ford India’s restructuring will advance the Ford+ plan for growth and value creation by strengthening automotive operations and capitalizing on unprecedented opportunities in electric and connected vehicles and enhanced customer experiences.

Ford India’s Vision for future with the New Restructuring

With the government’s PLI Scheme’s subsidies, Ford may be able to make a business case of using 2 largely unused plants in the country as a manufacturing hub for cost-effective EVs for its other markets. It plans to do by aiming to make 40% of its vehicles electric by the year 2030 globally.

Ford India continues to have a significant Research & Development presence in the country, which may be a further consideration in choosing India as an EV export hub. Ford is set to make India an export-only manufacturing base.

Ford Business Solutions plans to expand & provide more opportunities for software developers, data scientists, R&D engineers, and finance and accounting professionals, in support of the Ford+ plan to transform and modernize Ford globally, with more than 11,000 team members currently in India.

Additionally, with major Indian carmakers set to make an entry into the affordable EV segment, local production of EVs in India is set to ramp up in a big way over the next 2 years. This should in turn ramp up the EV supply chain already bolstered by the PLI Scheme. Ford also said that the company will return to the market with a small range of CBU offerings.

An investment of $30 billion for its electric lineup and battery development strategy announced last year by Ford Motor may play an important role in manufacturing affordable EVs with the rebates under the PLI scheme. As expected, Ford India is playing safe, but the company hasn’t ruled out the possibility of selling these locally manufactured EVs in India.

What’s Next?

Beyond the news that Ford could resume producing cars here for export, there are other exciting propositions that are yet to unravel.

Which models would be produced?

At which plant are they planning to do so?

Whether the vehicles produced will be offered to Indian buyers, and if so, when?

We can forecast a mix of locally made Ford electric cars and imported higher-end Fords in the near future. In either case, it is quite evident that Ford has not given up on India and is keen on keeping its options open in the Indian market.