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Tata Motors to buy Ford India’s Plant in Gujarat
May 31, 2022
Tata Motors’ subsidiary, Tata Passenger Electric Mobility Ltd (TPEML), and Ford India Private Limited (FIPL) have signed a Memorandum of Understanding (MOU) for the potential buying of FIPL’s Gujarat based Sanand vehicle manufacturing facility. This includes assets such as land, buildings, vehicle manufacturing plant/machinery/equipment and the transfer of all eligible employees of vehicle manufacturing operations. The financial details of the deal were not disclosed. To continue growth momentum in Tata Motors’ passenger and electric vehicles (EV) business, it has focused on increasing capacity utilization which requires augmenting manufacturing capacity. TPEML is expected to invest int new machinery and equipment which will make the unit ready to produce its vehicles. The company will establish an installed capacity of 300k units per annum, which is scalable to more than 400k units per annum. Mr. Shailesh Chandra, MD of TPEML said “Rising customer preference for passenger and electric vehicles made by Tata Motors has led to a multi-fold growth for the company over the past few years. This potential transaction will support the expansion of capacity, thus securing future growth and opportunity to further strengthen position in the passenger and electric vehicles space.” As part of expanding its EV business, Tata Motors had raised $1bn from private equity firm TPG last year. As per the agreement, FIPL will operate its powertrain manufacturing facilities by leasing back the land and buildings of the powertrain unit from TPEML.
Tata Motor’s dollar bonds were a tad higher with its 5.875% 2025 up 0.11 points to 101.17, yielding 5.44%.
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