Tata Motors subsidiary acquires Ford India’s plant in Sanand

A subsidiary of Tata Motors Ltd, Tata Passenger Electric Mobility Limited (TPEML), has agreed to acquire the manufacturing plant of Ford India Private Limited (FIPL) in Sanand, Gujarat, for INR725.7 crores (USD91.3 million), the company announced on August 7.

Ford India will continue to operate its powertrain manufacturing facility by leasing back the land and buildings from the Tata subsidiary on mutually agreed terms. 

In the event that Ford India ceases operations at the facility, Tata Passenger Electric Mobility has agreed to offer employment to the eligible employees of the facility.

The closure of the transaction will be subject to the receipt of relevant approvals from the government authorities and  fulfilment of customary condition precedents. The government of Gujarat, TPEML and FIPL have already executed a  tripartite memorandum of understanding (MoU) on May 30, 2022 to support all relevant approvals for the above transaction. 

“Today’s announcement marks an important step forward in Ford’s ongoing business restructuring in India, which is part  of our Ford+ plan for strategic transformation. With the transfer of employment for eligible vehicle manufacturing  employees included in the agreement, this milestone also highlights our best effort in caring for those impacted by the  restructuring,” said Steve Armstrong, Transformation officer, Ford Motor Company. 

Tata Motors Passenger Vehicles business has delivered market-beating growth over the last few years and has strong plans to sustain this momentum, with its robust pipeline of future ready “New Forever” products and proactive investments in  electric vehicles. 

“The agreement with FIPL signed today is beneficial to all stakeholders and reflects Tata  Motors strong aspiration to further strengthen its market position in the Passenger Vehicles segment and to continue to  build on its leadership position in the Electric Vehicle segment. It will accelerate the growth and development of the Indian  auto industry by taking a progressive step forward towards building a future ready Atmanirbhar Bharat,” said Shailesh Chandra, managing director, Tata Motors Passenger Vehicles Limited and Tata Passenger  Electric Mobility Limited.

Tata Motors said its manufacturing capacity is nearing saturation, and the “acquisition is timely and a win-win for all  stakeholders.” It will unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to  420,000 units per annum.

TPEML would make the necessary investments to reconfigure the plant to adapt to Tata Motors’ existing and future vehicle  platforms. The unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Limited at Sanand,  which should help in a smooth transition.