Tata Motors sign MOU for acquisition of Sanand plant with Ford India

With Ford announcing its exit from India last year, Tata Motors has shown interest in acquiring the American carmaker’s manufacturing plants in Gujarat. Though the latest development saw Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors Ltd, and Ford India Private Limited (FIPL), sign a Memorandum of Understanding (MOU) with the Government of Gujarat (GoG) for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility.

The Memorandum further states that TPEML will also take over the Sanand plant’s land & buildings, all associated machinery, and equipment at the vehicle manufacturing plant, along with the transfer of all eligible employees of FIPL Sanand’s vehicle manufacturing operations. However, Ford India will be retaining its powertrain manufacturing facilities by leasing back the land and buildings of the powertrain unit from TPEML.

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TPEML will be investing in this newly acquired plant via the latest machinery and equipment to make the plant compliant with the production of Tata cars. The Indian carmaker estimates a 300,000 units per annum output from the newly acquired plant. Additionally, the state-of-the-art facility is situated near Tata’s existing plant enabling an easy transition between the two. Moreover, Tata Motors can now accelerate its PV/EV manufacturing capacity with the acquisition of this plant.

All concerned parties have signed the MOU binding the conditions as mentioned above. A definitive transaction agreement between TPEML and FIPL should follow over the next few weeks.