Tata Motors signs MoU for the potential acquisition of Ford India's plant at Sanand in Gujarat

Mumbai, May 30, 2022

Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors Ltd, and Ford India Private Limited (FIPL), today signed a memorandum of understanding (MoU) with the Government of Gujarat (GoG) for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility.

The potential acquisition of the facility would include land and buildings; the vehicle manufacturing plant, machinery and equipment; and 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 operate its Powertrain manufacturing facilities by leasing back the land and buildings of the Powertrain unit from TPEML, a press release from Tata Motors said.

"Tata Motor’s Passenger and Electric Vehicles have delivered market beating growth with its 'New Forever' range of products over the last two years. This growth momentum is expected to continue with the strong pipeline of future ready products and our proactive investments in Electric Vehicles. With increasing capacity utilisations, sustaining this growth will require augmenting TML’s PV/EV manufacturing capacity in the coming years," the release said.

The Ford India vehicle manufacturing site at Sanand is a state-of-the-art site. TPEML will invest into new machinery and equipment which is necessary to commission and make the unit ready to produce its vehicles, the release said.

"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. We anticipate this to take a few months. 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 should help in a smooth transition," the company said.

Rajiv Kumar Gupta, 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' (self-reliance) vision of our Prime Minister.”

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.”

The MoU will be followed by signing of the definitive transaction agreements between TPEML and FIPL over the next few weeks, the release added.

NNN