Tata Motors To Acquire Ford India's Sanand Plant In Gujarat

Industry Outlook Team | Monday, 08 August 2022

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Tata Passenger Electric Mobility Ltd (TPEML), a Tata Motors subsidiary has bought the Ford India’s manufacturing plant situated at Sanand, Gujarat, including entire land and buildings, vehicle manufacturing plant along with machinery and equipment for a consideration of Rs 725.7 crore, Tata Motors said in a late night notification to the stock exchanges. The two companies signed a unit transfer agreement (UTA) for the same on Sunday. As part of the agreement all the eligible employees at the unit will be transferred to Tata Motors.

Ford India will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from TPEML on mutually agreed terms. TPEML has agreed to offer employment to the eligible employees of FIPL’s Powertrain Manufacturing Plant in the event of FIPL’s cessation of such operations. The plant offers 3,043 direct jobs and 20,000 indirect jobs. Ford India’s vehicle assembly plant is spread across 350 acres while the engine-manufacturing plant has 110 acres.

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, TPEML and FIPL executed a tripartite MoU on 30th May 2022 to support all relevant approvals for the above transaction.

With Tata Motors Passenger Vehicle's 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, the company said in the statement.

TPEML 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 Ltd at Sanand, which should help in a smooth transition.

“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 EV segment,” said Shailesh Chandra, managing director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility said. 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, he added.

Steve Armstrong, Transformation Officer of Ford Motor Company said the 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,” he said.