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

Tata Motors has signed a Memorandum of understanding with the Government of Gujarat for the potential acquisition of Ford India Pvt Ltd's Sanand vehicle manufacturing facility. The acquisition is set to include land and buildings, vehicle manufacturing plant and machinery as well as the transfer of all eligible employees. The acquisition will be “subject to the signing of definitive agreement and receipt of relevant approvals.” Following a deal being struck Ford India is expected to lease back the land and building s of its powertrain unit from Tata Motors to continue powertrain manufacturing operations. The signing of the MoU follows reports over the weekend that the state government had green lit Tata's move to acquire the plant.

Speaking on the occasion, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said, “Tata Motors has a strong presence in Gujarat for more than a decade with its own manufacturing facility at Sanand. This MoU further reinforces our commitment to the state by creating more employment and business opportunities. Rising customer preference for passenger and electric vehicles made by Tata Motors has led to a multi-fold growth for the company over the past few years. This potential transaction will support expansion of capacity, thus securing future growth and opportunity to further strengthen our position in the passenger and electric vehicles space.”

The acquisition is also expected to include all applicable employees of Ford's plant.

Tata Motors has said that following the acquisition it plans to invest into new machinery and equipment for the Sanand facility with an aim of establishing an installed capacity of 3 lakh units per annum scalable to 4 lakh units. Manufacturing will include models from both Tata's internal combustion engine and electric vehicle line-ups.

While Tata officially did not mention a quantum of investment, the company is reportedly looking to invest a further Rs. 2,000 crore into the facility. The company also has plans to roll out as many as 2 lakh EVs per annum from the facility.

Tata Motors plans to roll out 3 lakh units annually from the Ford facility including EVs and internal combustion models.

Tata has said that it will be working with Ford Motors India over a definitive agreement for the acquisition of the plant with an announcement likely to come in the following weeks.

Ford had announced the shutdown of its car manufacturing operations in India last year following years of making losses. However earlier this year, the company was again in the news over a potential turnaround of its decision with plans to manufacture EVs in India under the Central Government's PLI scheme. The company though recently revealed that it had pulled out of the scheme and would continue its original plans to import select models to India from its global line-up.