Ford sells India plant to Tata Motors

Indian automaker Tata Motors said on May 30 that it had signed a memorandum of understanding with Ford Motor to acquire a factory in India to boost its plans to expand production ofelectric vehicles.

Tata Motors said its subsidiary, Tata Passenger Electric Mobility Limited (TPEML), signed a memorandum of understanding with Ford India Private Limited (FIPL) and the government of Gujarat, India. , to acquire FIPL's factory in Sanand, Gujarat.

Image credit: Tata Motors

The acquisition includes land and buildings, vehicle manufacturing plants, machinery and all qualified employees of FIPL Sanand's vehicle manufacturing operations.FIPL will continue to operate its powertrain manufacturing plant by leasing back the land and buildings of the powertrain business from TPEML.However, financial details of the partnership were not released.The two sides will sign a final agreement in the coming weeks.

Tata said it will invest in new machinery and equipment at the plant through its electric mobility division, and expects the plant will have aproduction capacityof 300,000 units per year and can be increased to more than 400,000 units after the investment.

Over the past two years, Tata Motors' electric passenger vehicle business has achieved market-leading growth with the New Forever range.Last year, Tata's electric vehicle business also raised $1 billion from private equity firm TPG.

Growth momentum will continue with future product launches and the company's aggressive investments in electric vehicles.To sustain growth, Tata Motors will need to expand its production capacity in the coming years.Shailesh Chandra, general manager of TPEML, said, "Consumers are increasingly liking electric passenger vehicles produced by Tata Motors and our business has grown exponentially, and this transaction will help expand production capacity."

Last year, Ford stopped making cars in India.At the time, Ford had less than 2 percent of the Indian passenger car market.In February, Ford said it was considering the possibility of making electric vehicles in India, and that some of the new vehicles may also be exported.However, earlier this month, Ford said it had abandoned plans to export locally-made electric vehicles from India, while it was looking for a solution for two Indian plants that shut down last year.In addition, it was reported in early May that Ford was also looking for a buyer for its Chennai plant.