Tata Motors’ Electric Mobility Unit Signs MoU for Potential Purchase of Ford’s Gujarat Plant

Tata Motors on Monday said its electric mobility unit has signed an agreement to acquire Ford Motor’s Sanand vehicle manufacturing facility in the state of Gujarat.

The US automaker last year halted production in India, where it had less than 2 per cent of the passenger car market, and has been struggling to turn a profit for more than two decades.

The company said earlier this month that it was looking at options for its manufacturers in the country while it suspended plans to manufacture electric cars in India for export.

The Memorandum of Understanding between Tata Passenger Electric Mobility Ltd, Ford India Private Ltd and the Government of Gujarat includes land, assets and all qualified personnel working at the Sanand facility.

The company said Ford India will operate its powertrain manufacturing facilities by leasing land and buildings for the powertrain unit from its Tata Motors unit.

Earlier this month, Tata Motors’ chief financial officer said inflation and semiconductor shortages were the company’s biggest challenges, as owner Jaguar Land Rover (JLR) reported improved demand.

BP Balaji told reporters after Tata Motors reported a fourth-quarter loss, the Chinese shutdowns to tackle rising coronavirus cases also represent an emerging risk for the automaker.

“The two big concerns are inflation and semiconductors. It’s going to be a tough few months,” Balaji said, adding that the Ukraine crisis had exacerbated the situation.

Tata Motors will nonetheless meet its profit and cash flow targets for the year, Balaji said, adding that the combination of chip shortages and strong demand led to pending orders for about 168,000 vehicles in the JLR.

Carmakers around the world have gradually raised prices in an effort to deal with exorbitant raw materials and shipping costs, which are squeezing profit margins at companies looking to recover from the pandemic.

© Thomson Reuters 2022

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