Tata Passenger Electric Mobility Limited (TPEML), the EV division of Tata Motors Ltd, and Ford India Private Limited (FIPL) have signed a Memorandum of Understanding (MoU) with the Gujarat government, allowing Tata Motors to acquire Ford's Sanand plant.
- Tata Motors already has a plant in Sanand
- Acquisition will include land, building and employees
- Plant's capacity could go up to over 4 lakh units per annum
Ford’s Sanand plant: soon in Tata Motors’ hands
The acquisition will include possession of the land, buildings, the manufacturing plant and transfer of employees. Ford, however, will continue building its powertrain manufacturing facility by leasing the land back from Tata.
TPEML is expected to invest into new machinery and equipment, which is necessary to commission and make the unit ready to produce vehicles. The current capacity at the Sanand plant is 2.4 lakh vehicles and 2.7 lakh engines per annum. With the proposed plans, it would establish an installed capacity of 3 lakh units per annum, which would be scalable up to more than 4 lakh units. This will help Tata close in on its aim of building five lakh cars a year.
The potential acquisition of this unit is a win-win for all stakeholders, and helps Tata Motors accelerate the enhancement of its manufacturing capacity, including its EV plans. The fact that the Ford plant is adjacent to Tata Motors' existing manufacturing facility should help in a smooth transition.
“Tata Motors has had a strong presence in Gujarat for more than a decade with its own manufacturing facility at Sanand,” said Shailesh Chandra, managing director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited. “This potential transaction will support expansion of capacity to strengthen our position in the passenger and electric vehicles space.”
This MoU will be followed by signing of the definitive transaction agreements between TPEML and FIPL over the next few weeks.
Tata Motors future plans
Tata Motors recently trademarked four names for their upcoming cars and also showcased the Avinya and Curvv concepts in April 2022. The company's sales have been steadily increasing, and in December 2021, Tata even surpassed Hyundai to take the second spot in retail sales.
Do you think Tata Motors will benefit from the acquisition? Let us know in the comments.
Hormazd Sorabjee
Anurag Chaturvedi
