Following the announcement of restructuring plans in 2021, Ford India, on Sunday, signed an agreement with Tata Passenger Electric Mobility Ltd (TPEML) to sell the land and machinery at Ford India’s manufacturing plant at Sanand, Gujarat to TPEML.
TPEML which is in the business of developing and manufacturing EVs was founded in December 2021. It is a wholly-owned subsidiary of the Indian automobile giant Tata Motors.
According to the definitive agreement signed between both Ford India and TPEML, all the assets on the land including buildings, vehicle manufacturing plant etc are being acquired for a price of 725.7 crore Indian rupees.
The news about the deal broke out when Tata Motors made some late-night filings at stock exchanges where the company is listed.
The vehicle assembly plant at Sanand, which is spread across 350 acres, along with a manufacturing plant of 110 acres was opened by Ford India in 2015. The plant has a total capacity to make nearly 240000+ vehicles and 270000+ engines per year.
According to the agreed terms, Ford India would continue with the operations at the Sanand plant by taking the land and building for lease from TPEML. There is also a mutual agreement between Ford India and TPEML that in case of complete cessation of operations by Ford in India, the employees from its powertrain manufacturing plant would be recruited by TPEML as per eligibility.
Tata Motors said in a statement that the acquisition of a new manufacturing plant by the company is a win-win deal for all. The company said that it will conduct necessary reconfigurations inside and outside the plant which would make it perfectly apt for the present and future needs of vehicle manufacturing under Tata Motors.
The company believes that the state-of-the-art plant can build 3 lakhs units per year which can be increased to 4 lakh per year with necessary upgrades.
Managing director of Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility, Shailesh Chandra, said that the agreement signed with Ford India is beneficial to all stakeholders and that it would help Tata Motors continue to be the lead vehicle manufacturer in India in electric vehicle segment.
Steve Armstrong, who is a transformative officer of Ford Motor Company for India and South America, said that the deal with Tata Motors showcases the commitment of the company towards its employees and their welfare. Steve also said that under the new leadership of Tata Motors, the manufacturing plant along with its employees would continue to prosper.