Tata Motors' Electric Vehicle Arm Acquires Ford's Sanand Facility For Rs 725 Crore

Sanand unit has a manufacturing capacity of 3 lakh units per annum, which is scalable to 4.2 lakh units per annum, said Tata Motors

Tata Passenger Electric Mobility will get the entire land and buildings, vehicle manufacturing plant along with machinery and equipment at the Sanand facility.

Source : Getty

Tata Passenger Electric Mobility Ltd (TPEML), a Tata Motors subsidiary, has acquired Ford India’s manufacturing facility at Sanand in Gujarat for Rs 725.7 crore, as it aims to bolster its passenger vehicle production capacity, according to a stock exchnage filing.

Now, Tata Passenger Electric Mobility will get the entire land and buildings, vehicle manufacturing plant along with machinery and equipment at the Sanand unit, Tata Motors said in a statement. The deal also includes the transfer of all eligible employees, it added.

Tata Passenger Electric Mobility Ltd and Ford India Pvt Ltd have signed a Unit Transfer Agreement (UTA) for the acquisition of the Sanand-based plant. Tata Motors said with its manufacturing capacity nearing saturation, the acquisition is timely and a win-win for all stakeholders.

According to PTI report, the Sanand unit has a manufacturing capacity of 3 lakh units per annum, which is scalable to 4.2 lakh units per annum. Tata Passenger Electric Mobility will make the necessary investments to reconfigure the plant to adapt to Tata Motors' existing and future vehicle platforms, the automaker said.

The unit is adjacent to the existing manufacturing facility of Tata Motors at Sanand, which should help in a smooth transition, it added.

"The agreement with Ford India 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 electric vehicle segment," Tata Motors Passenger Vehicles MD Shailesh Chandra noted.

The Gujarat government, Tata Passenger Electric Mobility,  and Ford India executed a tripartite MoU on May 30, 2022, to support all relevant approvals for the above transaction.

As part of the arrangement, Ford India will continue to operate its power train manufacturing facility by leasing back the land and buildings of the plant from Tata Passenger Electric Mobility on mutually agreed terms, Tata Motors said.

Tata Motors's electric subsidiary has agreed to offer employment to eligible employees of the plant in the event of FIPL's cessation of such operations, it added. 

Ford Motor Company Transformation Officer Steve Armstrong said the announcement marks an important step forward in the company's ongoing business restructuring in India.

The US auto firm in September last year announced that it would stop vehicle production at its two plants in the country as part of a restructuring exercise.

Shares of Tata Motors were trading 0.75 per cent up at Rs 468.90 apiece on the BSE.