The Gujarat government has given Tata Motors permission to buy Ford India’s passenger car production plant in Sanand. According to TOI, Gujarat Chief Minister Bhupendra Patel will sign an MoU between Tata Motors and Ford Motor Company on Monday, May 30.
According to analysts, Ford Motor Company made the choice to leave India late last year due to a number of factors, including a misreading of the market, poor product design/positioning, and a large investment in a second factory when the first plant’s capacity was not completely utilized.
By April of this year, the company’s passenger vehicle manufacturing unit in Sanand had shut down. The cabinet has given the companies’ request a no-objection certificate, according to sources quoted by ToI. According to sources, an MoU will be inked between Tata Motors and Ford on Monday in the presence of Gujarat Chief Minister Bhupendra Patel.
an official said,
“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,”
A formal summit meeting for the MoU is scheduled for May 30 with representatives from both firms in attendance. According to an official, the state government has agreed to pass on all incentives offered to Ford to Tata Motors for the remainder of the concession arrangement.
Ford also halted ambitions to build electric vehicles in India for worldwide markets earlier this month.
Ford India was one of 20 firms chosen by the Indian government’s Production Linked Incentive Scheme, which was announced in February 2022. However, because it would no longer invest in the country, it may withdraw its application immediately.
The US automaker applied to join in the Government of India’s PLI scheme after announcing its exit in September 2021.
Featured Images: The Economics times
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