Tata Motors, the parent company of Jaguar Land Rover, has agreed to buy Ford Motor’s manufacturing plant in Sanand, in the state of Gujarat for $91.5 million (INR7,250 million/AED335.8 million).
Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors, and Ford India Private Limited (FIPL), signed the agreement for the acquisition of FIPL’s vehicle manufacturing facility, including land and buildings; vehicle manufacturing plant; machinery and equipment; and transfer of all eligible employees at the Sanand unit.
Ford, which could never become a major player in the Indian passenger automobile sector, announced last year that it would stop manufacturing vehicles in India due to accumulating losses. The company has a second plant in Chennai, which stopped production last month. Ford is yet to find a buyer for that facility.
TPEML has delivered market-beating growth with its ‘New Forever’ range of products over the last two years. This momentum is expected to continue with the strong pipeline of future-ready products and Tata’s investments in electric vehicles (EVs). With increasing capacity utilisations, sustaining this growth requires augmenting manufacturing capacity in the coming years, which makes the acquisition timely for Tata Motors.
With the proposed investments into new machinery by TPEML, the installed capacity of the Sanad factory will become 300,000 units per annum, scalable to more than 420,000 units.
In a statement, Tata Motors said: “With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders.”
According to industry estimates, there are currently over 3,000 direct jobs and about 20,000 indirect jobs being provided at the plant in Sanand.
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.”
Tata Motors is part of the USD109 billion Tata Group. It has operations in India, the UK, South Korea, Thailand, South Africa and Indonesia, and is supported by a strong global network of over 103 subsidiaries, 11 associate companies, four joint ventures and two joint operations.
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