CORPORATE

Tatas take the wheel of Ford India, buy US carmaker’s Sanand plant for Rs 726 crore

Late on Sunday, Tata Motors’ subsidiary Tata Passenger Electric Mobility (TPEML) announced that it had signed an agreement to buy Ford India’s manufacturing plant in Sanand, Gujarat, for Rs 726 crore. 

The deal, which the Indian carmaker calls a “win-win for all stakeholders”, will strengthen the Tatas’ “leadership position in the electric vehicle (EV) segment”. And it covers land, assets and all eligible employees. 

The Jaguar Land Rover (JLR) parent said that Sanand plant’s acquisition would unlock a manufacturing capacity of 3,00,000 units per year that could increase by 40 per cent to 4,20,000 units. 

Both the carmakers 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. 

For now, Ford India will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from the Tatas on “mutually-agreed terms”. 

TPEML has also agreed to offer employment to eligible employees of Ford India’s powertrain manufacturing plant. 

Tatas said that its passenger vehicles business had delivered market-beating growth over the last few years and had strong plans to sustain the momentum with its robust pipeline of future-ready “New Forever” products and proactive investments in EVs. 

TPEML would make necessary investments to reconfigure the plant to adapt to Tata Motors’ existing and future vehicle platforms, it added. 

In September last year, Ford India had said that it would “take a hit of about $2 billion as it does not see a path to profitability in India”. 

Ford struggled for years to turn profitable in India, while Maruti and Hyundai dominated India’s car market. 

Weak demand, low-cost cars by competitors and failed joint venture effort with Mahindra were some of the top reasons why the US auto major announced the exit. 

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