Tata Motors has agreed to purchase Ford Motor Company’s manufacturing facility in India’s western Gujarat state for Rs 7.26 billion rupees ($91.5 million). The agreement signed by the Indian automaker’s subsidiary Tata Passenger Electric Mobility Ltd and Ford India Pvt Ltd (FIPL) includes land and buildings, as well as a vehicle manufacturing plant and machinery and equipment, as well as all 1,400 employees in Sanand.
Tata Motors said in a statement that the two companies signed a unit transfer agreement (UTA) on Sunday. ‘ With our manufacturing capacity approaching capacity, this acquisition is timely and a win-win for all stakeholders,’ the company stated.
Ford’s manufacturing facility is close to Tata Motors Passenger Vehicles Limited’s existing manufacturing facility. The acquisition of the Sanand plant, according to the Indian automaker, will unlock a manufacturing capacity of 300,000 units per year, which could be increased to 420,000. Ford India will continue to operate its powertrain manufacturing facility by leasing back the powertrain manufacturing plant’s land and buildings from Tata Passenger Electric Mobility on mutually agreed-upon terms.
According to Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, ‘The agreement signed today with FIPL benefits all stakeholders and reflects Tata Motors’ strong desire to further strengthen its market position in the Passenger Vehicles segment while maintaining its leadership in the Electric Vehicle segment. It will accelerate the growth and development of the Indian automobile industry by taking a step toward constructing a future-ready Atmanirbhar (self-sufficient) Bharat’.
Ford ceased production in India last year after failing to make a dent in the Indian passenger vehicle market despite being present for more than two decades. It accounted for less than 2% of the vehicle market.