Jaguar Land Rover owner Tata Motors to buy Ford car plant in India
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Tata Motors, an Indian carmaker, has agreed to pay 7.26 billion rupees ($91.5 million) to acquire a Ford manufacturing facility in Gujarat, a state in western India.
The agreement comes as Tata increases its automobile production to keep up with demand.
The agreement between the Indian division of the US automaker and Tata’s electric vehicle subsidiary includes all “qualified personnel” as well as property and machinery.
For more than 20 years, Ford struggled to make money in India before ceasing production there last year.
With our manufacturing capacity approaching saturation, this transaction is opportune and beneficial to all stakeholders, according to a statement from Tata Motors.
The additional capacity of the Sanand facility will initially be 300,000 vehicles per year, with a potential rise to 420,000, according to the parent company of the UK’s Jaguar Land Rover.
According to Steve Armstrong, Ford’s transformation leader, the news marks a substantial improvement in Ford’s plans to restructure its Indian business.
Ford announced in September of last year that it would shut down its auto facilities in India as part of a $2 billion move.
The American automaker estimated that the move would have an impact on 4,000 workers at the time.
However, the demand has increased for some Indian automakers. One of Tata’s competitors, Mahindra & Mahindra, claimed on Friday that demand for its popular sport-utility vehicles was outpacing supply.
As a result, its quarterly profits increased, and passenger car sales increased by 74% over the previous year.
Rajesh Jejurikar, executive director of Mahindra and Mahindra, said, “We have started capacity expansion programmes, but we had not anticipated this level of demand.”
The automobile manufacturing arm of the Indian multinational conglomerate Tata Group is called Tata Motors.
In the UK, Tata Motors purchased Jaguar and Land Rover from Ford in 2008 and merged the British luxury car producers into one company.
The Tata Group is the owner of numerous significant companies throughout the world, notably Tata Steel Europe, which comprises the UK’s erstwhile British Steel assets.
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