Tata Motors to acquire Sanand plant, signs MoU with Ford, Gujarat govt

Automobile maker Tata Motors' subsidiary Tata Passenger Electric Mobility on Monday signed a tripartite Memorandum of Understanding (MoU) with Ford India and the government of Gujarat for takeover of Ford's passenger vehicle manufacturing facility at Sanand.

The MoU included land and buildings; vehicle manufacturing plant; machinery and equipment; and besides transfer of all eligible employees of Ford India's Sanand's vehicle manufacturing operations, subject to the signing of definitive agreements and receipt of relevant approvals, the automaker said in a regulatory filing.

The Ford India vehicle manufacturing site at Sanand is a state-of-the-art site. Tata Motors' arm 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, the filing said, adding it would take a few months time.

Notably, the unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles at Sanand, which it believes will 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. 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," said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.

This potential transaction will support expansion of capacity, thus securing future growth and opportunity to further strengthen the company's position in the passenger and electric vehicles space, Chandra said.

The MoU will be followed by signing of the definitive transaction agreements between Tata Motors' arm and Ford India over the next few weeks, the filing added.