Tata Motors to acquire Ford's Gujarat manufacturing plant

Tata Passenger Electric Mobility Ltd (TPEML) a subsidiary of Tata Motors  and Ford India Pvt Ltd (FIPL) have today (May 30) signed a memorandum of understanding (MOU) with the Gujarat government for the potential acquisition of FIPL's Sanand vehicle manufacturing facility. 

This includes land, buildings, vehicle manufacturing plant, machinery, and equipment, Tata Motors said in a regulatory filing.

The MoU also includes the transfer of all eligible employees of FIPL Sanand's vehicle manufacturing operations, subject to the signing of definitive agreements and receipt of relevant approvals, it added.

The MOU will be followed by the signing of the definitive transaction agreements between TPEML and FIPL over the next few weeks, the auto major stated.

TPEML is planning to invest in 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 3 lakh units per annum, which would be scalable to more than 4 lakh units.

Commenting on the development, Gujarat's Additional Chief Secretary Rajiv Kumar Gupta said the MoU is intended to catalyze a win-win for all the stakeholders and ensure a smooth transition. 

It will boost the confidence of the international investment community, reinforce Gujarat's position as the top investment destination in the country.

Earlier this month, the US auto major also shelved plans to manufacture electric vehicles in India for exports despite getting approval from the government for production-linked incentives. The company in September last year announced that it would stop vehicle production at its two plants in the country as part of a restructuring exercise.