Tata Motors Inks Pact For Potential Acquisition Of Ford India's Plant In Gujarat's Sanand

Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors Ltd, and Ford India Private Limited (FIPL), on Monday (30 May) signed a Memorandum of Understanding (MOU) with the Government of Gujarat (GoG) for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility.

The MoU includes potential acquisition of the facility's land & buildings, vehicle manufacturing plant, machinery and equipment and transfer of all eligible employees of FIPL Sanand’s vehicle manufacturing operations, subject to the signing of definitive agreements and receipt of relevant approvals.

FIPL will operate its powertrain manufacturing facilities by leasing back the land and buildings of the powertrain unit from TPEML, Tata Motors said in a security exchange filing on Monday.

"Tata Motor’s Passenger and Electric Vehicles have delivered market beating growth with its “New Forever” range of products over the last two years. This growth momentum is expected to continue with the strong pipeline of future ready products and our proactive investments in Electric Vehicles. With increasing capacity utilisations, sustaining this growth will require augmenting TML’s PV/EV manufacturing capacity in the coming years," the company said.

The Ford India vehicle manufacturing site at Sanand is a state-of-the-art site. TPEML would invest into new machinery and equipment which is necessary to commission and make the unit ready to produce its vehicles, it added.

With the proposed investments, it would establish an installed capacity of 300,000 units per annum, which would be scalable to more than 400,000 units, the company said.

The company expects the process would be completed in a few months.

"This MOU for a potential acquisition of this unit, is a win-win for all stakeholders and helps Tata Motors accelerate the enhancement of its PV/EV manufacturing capacity," the company said, adding that the unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Ltd at Sanand, which should help in a smooth transition.

Announcing the signing of this MoU, Dr Rajiv Kumar Gupta, IAS, Additional Chief Secretary, Government of Gujarat, said, “This MoU is intended to catalyse a win-win for all the stakeholders and ensure a smooth transition. This effort reinforces Gujarat’s image as a progressive, investment-friendly state and its resolve to further strengthen the state as a leading automotive hub in the country. It will boost the confidence of the international investment community, reinforce Gujarat’s position as the top investment destination in the country and further strengthen the Atmanirbhar vision of our Hon’ble Prime Minister”.

Speaking on the occasion, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said, “Tata Motors has a strong presence in Gujarat for more than a decade with its own manufacturing facility at Sanand. This MoU further reinforces our commitment to the state by creating more employment and business opportunities".

"Rising customer preference for passenger and electric vehicles made by Tata Motors has led to a multi-fold growth for the company over the past few years. This potential transaction will support expansion of capacity, thus securing future growth and opportunity to further strengthen our position in the passenger and electric vehicles space," he added.

This MOU will be followed by signing of the definitive transaction agreements between TPEML and FIPL over the next few weeks, the company said.