Tata Motors acquires Ford India’s Sanand plant for Rs 725 crore

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Tata Motors acquires Ford India’s Sanand plant for Rs 725 crore
With the proposed investments, it would establish an installed capacity of 300,000 units per annum, which would be scalable to more than 400,000 units. The company anticipates this to take a few months.

Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors, and Ford India Private Limited (FIPL), on Sunday, signed a Unit Transfer Agreement (UTA) for the acquisition of FIPL’s manufacturing plant situated at Sanand, Gujarat, which inter-alia includes:

(i) entire land & buildings.

(ii) Vehicle Manufacturing Plant along with machinery and equipment situated therein.

(iii) transfer of all eligible employees of FIPL’s vehicle manufacturing operations at Sanand, for a total consideration, exclusive of taxes, of Rs 725.7 crore. 

Earlier, Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors Ltd, and Ford India Private Limited (FIPL) signed a Memorandum of Understanding (MOU) with the Government of Gujarat (GoG) for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility.

Subject to the signing of definitive agreements and receipt of relevant approvals. FIPL will operate its Powertrain manufacturing facilities by leasing back the land and buildings of the Powertrain unit from TPEML.

Tata Motor’s Passenger and Electric Vehicles have delivered market-beating growth with its “New Forever” range of products over the last two years.

This growth momentum is expected to continue with the strong pipeline of future-ready products and our proactive investments in Electric Vehicles. With increasing capacity utilisations, sustaining this growth will require augmenting TML’s PV/EV manufacturing capacity in the coming years.

The Ford India vehicle manufacturing site at Sanand is a state-of-the-art site. TPEML would invest in new machinery and equipment which is necessary to commission and make the unit ready to produce its vehicles.

With the proposed investments, it would establish an installed capacity of 300,000 units per annum, which would be scalable to more than 400,000 units. The company anticipates this to take a few months.

This unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Ltd at Sanand, which should help in a smooth transition. The government of Gujarat, TPEML, and FIPL have already executed a tripartite MoU on 30th May 2022 to support all relevant approvals for the above transaction.

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.”

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”, Steve Armstrong added.

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