Tata Motors has signed an agreement to buy Ford Motor’s manufacturing unit in India’s western Gujarat state for Rs 7.26 billion rupees ($91.5 million).
The agreement signed between the Indian automaker’s subsidiary Tata Passenger Electric Mobility Ltd and Ford India Pvt Ltd (FIPL) includes land and buildings, vehicle manufacturing plant along with machinery and equipment, and also covers all the employees, pegged at 1,400, in Sanand.
On Sunday, the two companies signed a unit transfer agreement (UTA), Tata Motors said in a statement.
“With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders,” it said.
Ford’s manufacturing unit is near the existing manufacturing plant of Tata Motors Passenger Vehicles Limited. The Indian automaker said that the acquisition of the Sanand plant will unlock a manufacturing capacity of 300,000 units per year that could increase to 420,000.
Watch | Tata motors to buy Ford’s India plant
It added that Ford India will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from Tata Passenger Electric Mobility on mutually agreed terms.
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, in a statement said, “The agreement with FIPL signed today is beneficial to all stakeholders and reflects Tata Motors’ strong aspiration to further strengthen its market position in the Passenger Vehicles segment and to continue to build on its leadership position in the Electric Vehicle segment. It will accelerate the growth and development of the Indian auto industry by taking a progressive step forward towards building a future-ready Atmanirbhar (self-reliant) Bharat”.
Last year, Ford stopped production in the country after failing to make a dent in the Indian passenger vehicle market despite having a presence for over two decades. It had captured less than 2 per cent of the vehicle market.
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