US automaker Ford, which is quitting its operations in India, had been looking for buyers for its plants in Tamil Nadu and Gujarat. While things are still unsure with regard to Ford's plant at Maraimalai Nagar in the outskirts of Chennai, Tamil Nadu, its plant in Sanand, Gujarat is now getting a new owner.
Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors, and Ford India Private Limited (FIPL), have today signed a Memorandum of Understanding (MoU) with the Gujarat government for the potential acquisition of FIPL’s Sanand vehicle manufacturing facility including land & buildings, 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.
Tata's investment is meant for EVs
That the Tatas have chosen to invest in Ford plant through its EV subsidiary Tata Passenger Electric Mobility will make it clear where the company's focus is. It clearly wants to maintain its dominance in the EV market --- its Nexon EV is the country's leading vehicle in the segment by a huge margin.
Tata Motors said that to maintain its growth momentum it needs a strong pipeline of future ready products and 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," Tata Motors said, making it clear that it would utilise the Sanand car manufacturing facility for its EV business, too.
The Ford India vehicle manufacturing site at Sanand is a state-of-the-art site. Tata 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. This is expected 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 at Sanand, which should help in a smooth transition," Tata Motors added.
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said, "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."
This MoU will be followed by signing of the definitive transaction agreements between TPEML and FIPL over the next few weeks.
