Ford to sell Sanand facility to Tata Motors
TATA MOTORS has signed an agreement to potentially buy a Ford facility in the western Indian state of Gujarat as it looks to ramp up its production of electric vehicles (EVs).
The company already dominates India’s fledgling electric car market, which the government is trying to grow by offering companies billions of dollars in incentives.
The MoU announced on Monday (30) covers the land, assets and all eligible employees working at the Sanand facility. The financial details of the agreement were not disclosed.
Tata said it would invest in new machinery and equipment at the plant through its electric mobility unit, and expects the facility to have a production capacity of 300,000 units a year after the works are complete.
“Rising customer preference for passenger and electric vehicles made by Tata Motors has led to a multi-fold growth ... this potential transaction will support expansion of capacity,” said Shailesh Chandra, managing director of Tata Passenger Electric Mobility.
Tata Motors is set to invest $2 billion (£1.58bn) in EVs after fundraising from private equity firm TPG.
The rise of the utility sector is no surprise. The trend started nearly a decade ago and ramped up as gas prices plummeted from 2014 to 2016.
The Sanand sale follows Ford’s decision last year to stop production in India. It had a less than two per cent share of the passenger vehicle market and had struggled to turn a profit for more than two decades.
Ford said last month it was seeking options for its two factories in the country while shelving plans to make electric vehicles in India for exports.