Tata Motors Acquires Ford India’s Manufacturing Plant

Gujarat, India – Tata Passenger Electric Mobility (TPEML), a Tata Motors subsidiary, and Ford India have signed a Unit Transfer Agreement (UTA) for the acquisition of Ford India’s (FIPL) manufacturing plant located in Sanand, Gujarat, which inter-alia includes: (i) entire land & buildings; (ii) Vehicle Manufacturing Plant along with machinery and equipment situated therein; and (iii) transfer of all eligible employees of FIPL’s vehicle manufacturing operations at Sanand, for a total consideration, exclusive of taxes, of INR725.7 crore.

FIPL will continue to operate its powertrain manufacturing facility by leasing back the powertrain manufacturing plant’s land and buildings from TPEML on mutually agreed-upon terms. TPEML has agreed to hire eligible employees from FIPL’s powertrain manufacturing plant in the event that FIPL ceases operations.

The transaction will be completed subject to the receipt of necessary government approvals and the fulfillment of customary condition precedents. On May 30, 2022, the Gujarat Government, TPEML, and FIPL signed a tripartite MoU to support all relevant approvals for the above transaction.

With its robust pipeline of future-ready ‘New Forever’ products and proactive investments in electric vehicles, Tata Motors Passenger Vehicles has delivered growth over the last few years and has strong plans to sustain this momentum. With its manufacturing capacity nearing saturation, this acquisition is both timely and beneficial to all stakeholders. It will unlock a state-of-the-art manufacturing capacity of 300,000 units per year, scalable to 420,000 units per year.

TPEML would invest in reconfiguring the plant to accommodate Tata Motors’ existing and future vehicle platforms. The unit is located next to Tata Motors Passenger Vehicles Limited’s existing manufacturing facility in Sanand, which should aid in the transition.

Stating that the agreement with FIPL signed is beneficial to all stakeholders and reflects Tata Motors’ strong desire to further strengthen its market position in the Passenger Vehicles segment and to build on its leadership position in the Electric Vehicle segment, Shailesh Chandra, MD, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, commented, “It will accelerate the growth and development of the Indian auto industry by taking a progressive step forward towards building a future-ready Atmanirbhar Bharat.”

Noting that the announcement is an important step forward in Ford’s ongoing business restructuring in India as part of its Ford+ strategic transformation plan, Steve Armstrong, Transformation Office, Ford Motor Company, added, “With the transfer of employment for eligible vehicle manufacturing employees included in the agreement, this milestone also highlights our best effort in caring for those impacted by the restructuring. The shared values of trust, ethics and putting people first were the driving force behind our agreement with Tata Motors. We are confident that both the state-of-the-art manufacturing set-up as well as the world class talent will continue to prosper under the new leadership and help Tata Motors to scale new heights.”

Image Source: Magic Wand Media