Tata Motors signs MoU for acquiring Ford India’s Sanand plant

Tata Passenger Electric Mobility Limited (TPEML) and Ford India Private Limited (FIPL), have today signed a Memorandum of Understanding (MOU) with the Government of Gujarat (GoG) for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility. TPEML is a subsidiary of Tata Motors. Not to mention, this potential acquisition would include (i) Land & Buildings (ii) Vehicle Manufacturing Plant, Machinery and Equipment and (iii) 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 further enter into a sale and lease back agreement with TPEML for land and buildings of the Powertrain unit from to operate its Powertrain manufacturing facilities.

If you look at the growth of Tata’s EVs in India and their market share, this was a no brainer deal for them to further one up their competition and not wait for them to catch up. After all, no one would like for your production to catch up with your EV demands. Right, Tesla?

The Ford India vehicle manufacturing site at Sanand is a state-of-the-art facility. Tata claims that 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.

Although, this would not be happening in a matter of days and the transition would take a few months at the least. 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 is another plus for them enabling a smoother 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, Mr. 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.”