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Tata Motors Electric Acquires Ford's Sanand Plant for Rs 725 Crore

By: Auto Desk


Last Updated: August 08, 2022, 13:21 IST

Mumbai, India

Tata Motors already has a manufacturing facility in Sanand which is adjacent to Ford's factory (Image Credits: Tata Motors)

Tata Motors already has a manufacturing facility in Sanand which is adjacent to Ford's factory (Image Credits: Tata Motors)

Tata Motors Electric can wheel out 3 lakh cars annually from Ford's Sanand plant which is further scalable to 4.20 lakh units

Tata Passenger Electric Mobility Limited (TPEML), the EV arm of Tata Motors, has acquired the Sanand manufacturing facility of Ford India in Gujarat. Under the Unit Transfer Agreement (UTA), Tata will get the entire land & buildings and Vehicle Manufacturing Plant along with machinery and equipment, and transfer of all eligible employees of Ford’s vehicle manufacturing operations at Sanand, for a total consideration, exclusive of taxes, of Rs 725.7 Crore.

Ford will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from Tata Motors Electric on mutually agreed terms. Tata has agreed to offer employment to the eligible employees of Ford’s powertrain manufacturing plant in the event of the American automaker’s cessation of such operations.

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, Tata and Ford had already executed a tripartite MoU on May 30, 2022 to support all relevant approvals for the above transaction. Both the companies will work together over the next few months to satisfy all the condition precedents and obtain the required regulatory approvals for the closure of the transaction.

Ford Sanand Production Facility
Ford Sanand facility began production in 2014 (Image Credits: Bloomberg)

“With our manufacturing capacity nearing saturation, this 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. 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,” read an official statement from Tata Motors.

Announcing this, Mr. 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”.

Ford Gujarat Plant
Tata has acquired Ford’s Gujarat plant for Rs 725 Crore (Image Credits: AutoCar India)

“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 of Ford Motor Company.

“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,” Armstrong added.

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first published:August 08, 2022, 13:21 IST
last updated:August 08, 2022, 13:21 IST