Ford withdraws from the agreement to sell its Tamil Nadu plant to JSW, terminating the deal.

Ford Motor Co. has unexpectedly reversed its decision to sell its sole remaining factory in India, located in Tamil Nadu, to the JSW Group led by Sajjan Jindal. This surprising move has sparked speculation about a potential re-entry into the Indian market, from which Ford exited over two years ago. The Maraimalai Nagar-based plant had been on the market since Ford's departure in September 2021 due to increasing losses and market challenges following the COVID-19 pandemic.

JSW, having recently acquired a 35% stake in a joint venture with SAIC, had previously agreed to purchase the Ford plant for approximately $100 million. However, Ford has now canceled the deal, signaling a shift in its plans. In January, Tata Motors acquired Ford's Sanand plant in Gujarat for Rs 725.7 crore, strengthening its electric vehicle (EV) production capabilities.

Ford's departure from India in September 2021 was framed as a business restructuring for long-term sustainability, with the company retaining its engine manufacturing and technology services. Despite accumulating over $2 billion in operating losses over the past decade, the Indian market has seen a sharp revival post-pandemic, with record-level sales. Ford India, turning profitable in FY23 with Rs 505 crore in profits, continued vehicle and engine exports until July 2022.

The closure of the Chennai plant was intended to facilitate JSW's entry into the EV market, aligning with Sajjan Jindal's aspirations. The growth of the EV segment in India has prompted global automakers to reassess their strategies.

In October, Ford appointed India-born Kumar Galhotra as COO, reflecting the company's ongoing engagement with the Indian market. The pandemic and the dissolution of the joint venture with Mahindra & Mahindra in January 2021 added challenges to Ford's Indian operations. The decision to cease manufacturing in 2021 was part of a broader restructuring plan, considering various options, including contract manufacturing.

Despite being selected for the government's Productive Linked Incentive Scheme, Ford opted out in May 2022. Recently, Ford reduced its yearly guidance by $1 billion, citing new contracts with United Auto Workers and anticipating a significant cost increase for each vehicle. This decision comes as the company revises its financial outlook amid evolving market conditions.