Tata Motors signs pact to takeover Ford's plant in Gujarat
Homegrown automaker Tata Motors' EV division, Tata Passenger Electric Mobility Limited (TPEML) is all set to acquire Ford's factory in Sanand, Gujarat. The two brands have inked a Memorandum of Understanding (MoU) with the State government to get permission for the same. The latest acquisition should aid Tata in fulfilling its dream of manufacturing five lakh cars a year.
Why does this story matter?
Tata Motors has a production facility adjacent to Ford's plant in Sanand. This will ensure smooth logistics and aid Tata in scaling up its manufacturing prowess. The potential issue of anxiety due to job losses has also been nipped in the bud. This is a win-win situation for all stakeholders. Now, what happens to Ford's factory in Tamil Nadu remains to be seen.
Here's a look at the Sanand factory
Ford's factory in Sanand was built at an investment of $1 billion and commenced operations in 2015. Spread over an area of 460 acres, this state-of-the-art facility is highly automated and energy-efficient. This facility houses an engine manufacturing plant, a vehicle assembly unit, and also caters to service parts production. It was used to manufacture cars like Ford Figo and Aspire.
What does the acquisition entail?
Post-acquisition, TPEML will possess the land, manufacturing plant, buildings, as well as Ford's employees. However, Ford will continue making powertrains at the factory by leasing a section. TPEML should invest in new machinery to boost production. The plant's current capacity is 2.4 lakh vehicles and 2.7 lakh engines per year. The aim is to raise the installed capacity to 3 lakh units per annum.
'Plant acquisition will aid in strengthening position in the market'
The managing director of Tata Motors, Shailesh Chandra put out a statement hailing the merits of the acquisition. "Tata Motors has had a strong presence in Gujarat for more than a decade with its own manufacturing facility at Sanand." "This potential transaction will support the expansion of capacity to strengthen our position in the passenger and electric vehicles space," he added.
