Tata Motors gets Gujarat govt nod to take over Ford's Sanand plant

Tata Motors has got the permission to take over US auto major Ford Motor Company's passenger car manufacturing plant in Sanand, Gujarat. Earlier this week, the Gujarat cabinet cleared proposal to take the deal forward, which was submitted by the two carmakers.

Ford Motor Company announced its decision to leave India late last year due to various factors like wrong-reading of the market/product design/positioning and huge investment in a second plant when the first plant capacity itself was not fully utilised, according to experts.

The company’s passenger vehicle manufacturing plant in Sanand stopped operations by April this year. According to sources quoted by ToI, the cabinet has issued a no-objection certificate to the companies' proposal. An MoU will be signed between Tata Motors and Ford on Monday in front of CM Bhupendra Patel, sources added.

"The Gujarat cabinet's approval is only a green signal... The companies are still in talks to work out the nitty-gritties with regard to the deal size, labour issues, financials, and duties and benefits involved in the takeover. Once the two firms agree, a definitive agreement may be inked between the two automakers," an official said.

A formal ceremony for the MoU signing is being planned for May 30, wherein representatives of both companies will be present. The state government has agreed to pass on all benefits offered to Ford to Tata Motors for the remaining period of the concession agreement, according to an official.

Earlier this month, Ford also dropped its plans to make EVs in India for the global markets.

Ford India was amongst 20 different companies who were selected under the Government of India's Production Linked Incentive Scheme announced in February 2022. But it may withdraw its application now, as it will no longer invest in the country.

After announcing the exit in September of 2021, the US carmaker did apply to participate in the Government of India's PLI scheme.