Tata Motors Acquires Ford India's Sanand Plant For Rs. 725.70 Crore

Tata Passenger Electric Mobility Limited (TPEML) and Ford India Private Limited signed a Unit Transfer Agreement (UTA) for the acquisition of the latter's Sanand manufacturing plant in Gujarat. The agreement includes entire land and buildings, the vehicle manufacturing facility as well as the machinery and equipment inside. It also includes the transfer of all eligible employees of Ford India working at the Sanand plant to Tata Motors. The Indian auto giant acquired the facility from Ford for a sum of Rs. 725.7 crore exclusive of taxes, the company said in a statement. Both companies signed a tripartite MoU on May 30, 2022.

Also Read: Tata Motors Signs MoU With Gujarat Government For Ford's Sanand Plant Acquisition

Announcing the acquisition, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said, "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".

Steve Armstrong, Transformation Officer of Ford Motor Company, said, "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. The shared values of trust, ethics and putting people first were the driving force behind our agreement with Tata Motors. We are confident that both the state-of-the-art manufacturing set-up as well as the world-class talent will continue to prosper under the new leadership and help Tata Motors to scale new heights."

Ford India will continue to operate its powertrain manufacturing facility at the Sanand plant by leasing back the land and buildings of the Powertrain Manufacturing Plant from TPEML on mutually agreed terms, the statement read. Tata will be offering employment to all the eligible employees of Ford's Powertrain Manufacturing Plant if the American auto giant ceases operations at the facility. The closure of the transaction will be subject to the receipt of relevant approvals from government authorities.

Tata Motors' is bullish about its EV growth and the company receives an additional manufacturing capacity of 3 lakh units with the acquisition

Tata intends to transform Ford's Sanand plant for manufacturing electric vehicles in the future. The company says its current production facilities are nearing saturation and this acquisition will unlock an additional capacity of 300,000 units annually with a scalable opportunity of up to 420,000 per year. The company also said it will be making additional investments to reconfigure the plant to adapt to Tata's existing and future vehicle platforms. Do note that this will be Tata's second passenger vehicle plant in Sanand and in close proximity. The next couple of months will see both companies work together towards a smooth handover whilst meeting the regulatory approvals for the closure of the transaction.

With this, Ford's run in manufacturing cars in India comes to an end. While the company won't be actively dabbling into the mass market segment, it does plan to stick around with halo offerings like the Mustang and Mustang Mach-e, among others, which are set to officially arrive in the future.