Tata Motors signs MoU to acquire Ford India’s Sanand plant
31 May 2022
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Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors Ltd, and Ford India Private Limited (FIPL), on Monday signed a memorandum of understanding (MoU) with the government of Gujarat for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility.
Under the MoU, TPEML will acquire land and buildings, vehicle manufacturing plant, machinery and equipment and transfer all eligible employees of FIPL Sanand’s vehicle manufacturing operations, subject to the signing of definitive agreements and receipt of relevant approvals.
The plant currently gives direct employment to 3,043 people and indirect employment to 20,000 more.
FIPL will operate its powertrain manufacturing facilities by leasing back the land and buildings of the powertrain unit from TPEML. The terms of the deal are yet to be disclosed.
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. 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.
“We anticipate this to take 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. This unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Ltd at Sanand, which should help in a smooth transition, Tata Motors stated in a release.
A statement from the chief minister’s office stated that the whole takeover process was completed within 90 days due to Chief Minister Bhupendra Patel-led Gujarat government's "positive approach" and will help in averting an unemployment crisis that could have emerged at the Sanand plant.
“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,” Shailesh Chandra, managing director of Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said while speaking on the occasion.
Tata Motor’s Passenger and Electric Vehicles has 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 release pointed out.
TPEML and FIPL will be signing definitive transaction agreements over the next few weeks, the release added.
