Tata Motors signs MoU for a potential takeover of Ford India’s Sanand plant

The country’s second-largest PV manufacturer Tata Motors EV subsidiary Tata Passenger Electric Mobility Limited (TPEML) and Ford India Private Limited (FIPL) have recently signed a Memorandum of Understanding (MOU) with the Government of Gujarat (GoG) for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility.

According to this MoU, TPEML will acquire the land, buildings, vehicle manufacturing plant, machinery, 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 production facilities by leasing back the Powertrain unit’s land and buildings from TPEML.

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.”

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Meanwhile, 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.”

The Ford India car manufacturing factory in Sanand is a state of the art automobile production facility. However, following the acquisition, TPEML would invest in new machinery and equipment required to commission and prepare the plant for its vehicle production. It would establish an installed capacity of 300,000 units per year with the proposed investments, which would be scalable to more than 400,000 units.

The company expects the procedure to take a few months and it further stated that this MOU for a prospective acquisition of this plant is a win-win situation for all parties and would assist Tata Motors in speeding the expansion of its PV/EV production capacity. This plant is next to Tata Motors Passenger Vehicles Ltd’s current manufacturing site in Sanand, which should aid in the transition.

Currently, Tata Motors is the largest electric vehicle manufacturer in the country and with its plans to further electrify its portfolio, this acquisition will certainly help it a lot. Recently Tata Motors launched the extended-range variant of the Nexon EV called the Nexon EX Max at an attractive starting price of INR 17.74 lakh (ex-showroom, India). It offers an ARAI certified range of 437 km (the regular version offers a 312 km claimed range).

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