Business & Economy

Tata to acquire Ford Motor plant in India

New Delhi, Aug 8 (EFE).- Indian business conglomerate Tata Group revealed on Monday that it was acquiring a Ford Motors plant in India along with all of its buildings and machinery as the United States-based car maker tries to reduce losses after shutting its operations in the country.

The agreement worth $91 million signed between Tata Group and Ford India Private Limited (FIPL) was announced in a statement dated Sunday, which was released a day later.

The deal includes the transfer of the “entire land & buildings, Vehicle Manufacturing Plant along with machinery and equipment situated therein, and (…) all eligible employees” of the plant situated in Sanand, a city in the western state of Gujarat.

The Sanand plant is one of the two owned by the American carmaker in India and has been manufacturing its compact models Ford Figo, Ford Aspire and Ford Freestyle, while the other facility in the southern city of Chennai produced sports utility vehicles Ford EcoSport and Ford Endeavour.

The statement said that Ford would “continue to operate its Powertrain Manufacturing Facility by leasing back the land and buildings of the Powertrain Manufacturing Plant from Tata on mutually agreed terms.”

Tata has also agreed to offer employment to eligible employees of the Ford plant if the US carmaker ceases these operations, a clause that Ford hailed as its “best effort in caring for those impacted by the restructuring.”

The deal, which has to be approved by Indian authorities, “marks an important step forward in Ford’s ongoing business restructuring in India, which is part of our Ford+ plan for strategic transformation,” said Steve Armstrong, the Transformation Officer of Ford Motor Company.

In September 2020 Ford had announced that it was closing both of its manufacturing units in India after registering operational losses worth over $2 billion over a decade, even as the demand for new vehicles has stagnated.

Despite making several attempts to make inroads into the Indian market, Ford became the second US carmaker to shut operations in the country, after General Motors closed operations in 2017 due to mounting losses.

Meanwhile Tata’s passenger vehicles business “has delivered market beating growth over the last few years and has strong plans to sustain this momentum,” the statement said.

“With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders. It will unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum,” it added.


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