Tata Motors to purchase Ford Sanand plant
On January 10, 2023, the sale of the Ford Sanand plant will be finalized between Ford India Private Limited (FIPL) and Tata Passenger Electric Mobility Limited (TPEML), a division of Tata Motors Limited. On August 7, 2022, TPEML inked a unit transfer agreement to buy Ford’s manufacturing plant in Sanand, Gujarat.
With this, Tata Motors will acquire all of the land and buildings, the vehicle manufacturing plant, as well as all of the machinery and equipment that are housed there, for a total of Rs 725.7 crore, and will transfer all of the qualified workers from Ford’s vehicle manufacturing operations at Sanand.
Tata Motors stated in a stock exchange filing that the acquisition will “unlock an additional cutting-edge manufacturing capacity of 300,000 units per year which is scalable to 420,000 units per year when the company’s present capacities near saturation.”
All qualified Ford India Private Limited employees have received an employment offer from TPEML as part of the deal, with equivalent terms, conditions, and perks to those they already receive.
In September of last year, Ford India said that it will “take a hit of nearly $2 billion as it does not see a road to profitability in India.”
Ford Sanand plant
Ford struggled for years to turn a profit in India, where Maruti and Hyundai controlled the auto market.
A number of factors led to the US auto giant’s announcement of its exit, including a lacklustre demand, the low prices of rivals’ cars, and a failed joint venture (JV) with Mahindra.
The Managing Director of Ford India stated that “the decision was strengthened by years of cumulative losses, continuing industry overcapacity, and lack of expected development in India’s automotive market.”
In the middle of the 1990s, Ford and Hyundai entered the Indian market. But the two companies’ outcomes are totally different. Ford stopped producing cars as Hyundai grew to become the second-largest automaker in the country.