Both companies have submitted a consented proposal for transfer of ownership of Ford’s passenger vehicle manufacturing plant to Tata Motors. In all likelihood, a High-Power Committee(HPC) appointed by the state government will give a nod to the proposal, clearing the pathway for Tata Motors’ takeover of the plant next week.
Speaking to ET Auto, a source closed to the development said, “An HPC was formed by the Gujarat government in April 2018 to resolve issues related to implementation of large projects. The committee is chaired by the chief minister. During the HPC meeting scheduled next week, the proposal of Ford India to transfer its vehicle assembly plant at Sanand to Tata Motors and issues related to the transfer will be discussed at length and finalized.”
It remains to be seen whether
Tata Motors will enjoy the exceptional incentives and benefits it had been
given at the time of starting the Nano plant at Sanand for the new plant it is
set to acquire. A decision will be taken on whether the company will get added
benefits or same that were extended to Ford India.
Ford Motor Company had invested
Rs 4,500 crore to set up the plant with a capacity to manufacture 2.4 lakh
units and 2.7 lakh engines per annum.
The company has accumulated operating losses of around $2 billion in India in the last decade.
Tata Motors was one of the first
entrants in Gujarat’s Mo-Town, Sanand, with an investment of Rs 4,500 crore
with a capacity of manufacturing 1.5 lakh units per annum. The plant presently
manufactures Tigor, Tiago and Tigor EV variants. In response to an email query,
the Tata Motors spokesperson said one would not comment on speculation and
market rumors.
Following Ford Motor Company’s announcement to exit its India operations, Tata Motors was among the front-runners as a buyer for Ford India’s plant. The passenger vehicle plant was scheduled to shut down in December 2021 however, later, the company deferred it by a quarter to March 2022 in a bid to fulfill order commitments – mainly of auto components required in Ford cars.
Tata Motors seems to be interested in the Ford plant to keep pace with the recent surge in its sales in the Indian market. The company's Snand facility has been running at full capacity and with production planning a key reason behind it being able to meet delivery targets in the chip shortage, the additional capacity will help it streamline operations further. The company also has some big expansions planned, especially in the EV space, which an additional plant will help fulfill.
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