Tata Motors looks set to take over Ford India’s passenger vehicle manufacturing plant in Sanand, 40 km from Ahmedabad.
Both the companies have submitted a consented proposal to transfer Ford’s passenger vehicle manufacturing plant ownership to Tata Motors. A High-Power committee (HPC) will give a nod to the proposal.
The government of Gujarat formed an HPC in April 2018 to resolve issues related to the implementation of large projects. The chief minister chairs the committee.
Tata and Ford Motors have been in talks for Tata Motor’s takeover of the Ford plant in Sanand ever since the American auto major announced its exit from India last year.
An HPC meeting is scheduled next week, in which issues related to the transfer of Ford India’s vehicle assembly plant at Sanand to Tata Motors will be discussed at length and finalised.
It will be interesting to see whether Tata Motors will enjoy the special incentives and benefits for the plant it is set to acquire like it had been given when starting the Nano plant at Sanand. Then, a decision will be taken on whether the company will get added benefits or the same extended to Ford India.
Ford Motor Company had invested Rs 4,500 crore to set up the plant to manufacture 2.4 lakh units and 2.7 lakh engines per annum. But the last decade, the company has accumulated operating losses of around $2 billion in India.
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 to fulfill order commitments, mainly of auto components required in Ford cars.
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