Tata Motors Ltd, an Indian carmaker, has inked a proposed deal to buy a Ford Motor Company (NYSE : F) manufacturing site in Gujarat, in the western state of India, as it tries to expand its production of electric vehicles.
Tata Motors to buy Ford’s Senand production facility
The Jaguar Land Rover owner already has a stranglehold on India’s nascent electric car sector that the government is attempting to expand by providing companies with billions in subsidies. The assets, land, and qualified personnel operating at the Sanand complex are covered by the letter of intent published on Monday. The agreement’s financial terms were not made public.
Tata stated that its electric mobility division would invest in modern equipment and machinery at the factory, which it hopes to have a manufacturing capacity of around 300,000 vehicles per year after completing the. As a result, it is possible to expand the output to over 400,000 cars.
Shailesh Chandra, Tata Passenger Electric Mobility Ltd’s managing director, said, “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.”
Last year, Tata received $1 billion through a private equity company TPG for its electric vehicle division, which competes with Mahindra and Mahindra.
Ford to shut operations at Senand and Chennai facilities
The company’s interest in the Sanand facility comes after Ford said last year that it would cease operations in India. Ford has a market share of less than 2% and was unable to generate a profit for over two decades from its operations.
At the beginning of this, Ford announced that it was looking for alternatives for the two facilities in India at Chennai and Sanand. The company indicated that the changes could cost almost $2 billion, which included $600 million last year and $1.2 billion this year, with the rest following in the coming years. The company had promised to end operations at Sanand at the end of the years, with the folding of operations in Chennai expected to follow in Q2 2022.
