The Sajjan Jindal-led JSW Group is in advanced talks to acquire the shuttered Chennai factory of Ford Motor Co. for its planned entry into electric-vehicle (EV) space, two people aware of the matter said.
“Talks started a couple of months earlier and are in an advanced stage now, and the company is speaking to both the state government and Ford,” one of the persons said on condition of anonymity.
Spread over 350 acres, the Ford factory has an annual production capacity of around 200,000 vehicles and 340,000 engines. The plant has been shut since July 2022. The Tamil Nadu government is also keen that it finds a new owner who can restart production.
In September 2021, Ford decided to close its operations in India and wind down vehicle assembly, both in Sanand, Gujarat, and in Chennai, Tamil Nadu. While Tata Passenger Electric Mobility Ltd completed the acquisition of Sanand plant for ₹725.7 crore this January, the Chennai unit is yet to find a buyer.
The development comes at a time when the JSW Group has intensified attempts to enter the automobile sector, including acquiring a stake in MG Motor India Pvt. Ltd, a subsidiary of China’s SAIC Motor Corp. Ltd.
“Not just buying stake in MG Motor, the group is clearly researching to understand EV manufacturing, and the top management also visited China to understand the market,” the second person said, also on condition of anonymity.
On Friday, Jindal said in a television interview that the group, apart from ongoing talks with MG Motor India, is also working on a parallel plan to make its own EVs. If talks with Ford bear fruit, the Chennai plant could become an integral part of that plan.
A spokesperson for the JSW Group said it was evaluating several opportunities.
“EVs will be the primary mode of mobility over the next 6-7 years in India. This provides a sizable business opportunity for the JSW Group and we intend to seize it. As part of our plans to enter the EV space, we are currently evaluating a number of organic and inorganic opportunities. However, it is premature to offer any specific details until a certain direction is agreed,” the spokesperson said in an email response.
This would not be the JSW Group’s first attempt to enter the automobile industry. In 2018, it had earmarked ₹6,500 crore to acquire a General Motors manufacturing facility in Pune’s Talegaon. The company, however, abandoned the plans in 2019 and said it would instead focus on growth opportunities in the power sector.
In 2022, the group began revisiting its EV manufacturing plans; however, this time, it planned to do it through a special incubator that would be a private entity within the conglomerate.
Ford said it is exploring all avenues. “We continue to explore alternatives for the Chennai plant and have no further information to provide at this point,” said a company spokesperson.
While existing Indian automakers are venturing into EV manufacturing, new ones like the JSW Group are also drawn to the allure of growth. It is estimated that the EV market in India, being valued at $2 billion by 2023, is expected to grow to $7.09 billion by 2025. The EV population in the country is estimated at about 1.4 million EVs as of August 2022, and is likely to increase to 50 million by 2030. The industry also estimates the domestic EV market to reach 10 million annual sales by 2030.
