Tata Motors signs an agreement to pay Rs 726 crore for Ford India's Sanand facility

According to Tata Motors, its subsidiary has signed a contract to pay Rs 725.7 crore to buy Ford India's Sanand manufacturing facility.

A Unit Transfer Agreement (UTA) for the purchase of the Gujarat-based factory has been signed by Ford India Pvt Ltd (FIPL) and Tata Passenger Electric Mobility Ltd (TPEML), both of which are subsidiaries of Tata Motors.

According to a statement released by the Mumbai-based car giant, Tata Motors would receive the complete plot of land, the buildings, the vehicle manufacturing facility, as well as the machinery and equipment that are now located there. All transferable staff are also part of the agreement, it was said.

According to Tata Motors, FIPL will continue to run its power train manufacturing facility by renting the land and buildings of the factory from TPEML under mutually agreeable terms. In the case that FIPL ceases such operations, TPEML has committed to extend an offer of employment to qualified plant workers, it was said.

On May 30, 2022, the Gujarati government, TPEML, and FIPL already signed a tripartite memorandum of understanding (MoU) to support the necessary clearances for the aforementioned transaction. As its manufacturing capacity approaches saturation, according to Tata Motors, the acquisition is opportune and beneficial to all parties involved.

The Sanand facility has a 3 lakh unit annual production capability that may be increased to 4.2 lakh units annually. According to Tata Motors, TPEML will make the necessary expenditures to modify the factory to accommodate both current and upcoming car platforms.

The business is close to Tata Motors Passenger Vehicles Limited's current Sanand manufacturing facility, which should aid in a smooth transfer, it was said.

The agreement with FIPL that was signed today is advantageous to all parties involved and reflects Tata Motors' strong desire to further solidify its market position in the passenger vehicle segment and to maintain its leadership position in the electric vehicle segment, according to Shailesh Chandra, MD of Tata Motors Passenger Vehicles.

The announcement, according to Ford Motor Company Transformation Officer Steve Armstrong, represents a significant advancement in the company's ongoing business restructuring in India.

The business said in September of last year that as part of a restructuring effort, it will halt vehicle production at its two sites in the nation.

According to Tata Motors, TPEML and FIPL would collaborate over the coming months to meet all condition precedents and secure the necessary regulatory clearances for the transaction's conclusion.