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A Unit Transfer Agreement (UTA) for the purchase of FIPL’s production facility in Sanand, Gujarat, was signed on Sunday by Tata Passenger Electric Mobility Limited (TPEML), a division of Tata Motors Ltd., and Ford India Private Limited (FIPL).

Tata Motors claims that FIPL will continue to run its Powertrain Manufacturing Facility by subleasing the land and structures of the Powertrain Manufacturing Plant from TPEML under mutually agreeable terms. In the event that FIPL stops conducting such operations, TPEML has promised to offer employment to the qualified workers at the Powertrain Manufacturing Plant.

All qualified employees of FIPL’s car manufacturing operations in Sanand would be transferred, for a total consideration of Rs 725.7 crore (exclusive of taxes), together with the entire land and buildings, the Vehicle Manufacturing Plant, and the machinery and equipment housed there.

The deal with FIPL, which was signed today, is advantageous to all parties involved and represents Tata Motors’ strong desire to further solidify its market position in the passenger vehicle segment and to maintain its leadership position in the electric vehicle area. By taking a progressive step toward creating an Atmanirbhar Bharat that is ready for the future, it will hasten the growth and development of the Indian auto industry, according to Shailesh Chandra, managing director of Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited. Tata Motors claims that this transaction is timely and beneficial for all parties involved as a result of its manufacturing capacity being close to saturation.

It will open up a modern manufacturing capability of 3 lakh units annually, which is expandable to 4.2 lakh units annually. TPEML would undertake the necessary investments to modify the factory to accommodate both the current and next car platforms from Tata Motors. A smooth transfer should be made possible by the unit’s proximity to Tata Motors Passenger Vehicles Limited’s current Sanand production site.

The deal will only be finalized once all necessary permits from the government agencies have been obtained, together with the fulfillment of typical prior condition precedents. A tripartite Memorandum of Understanding (MoU) was already signed by the Gujarat government, TPEML, and FIPL on May 30, 2022, to support all necessary clearances for the aforementioned transaction. 

As part of the Ford+ vision for strategic change, today’s announcement represents a significant advancement in Ford’s ongoing business reorganization in India. This accomplishment also demonstrates our best efforts in taking care of those affected by the restructuring, according to Steve Armstrong, Ford Motor Company’s Transformation Officer. The transfer of employment for qualified vehicle manufacturing personnel is included in the agreement.

Read More: Tata Motors builds a strong ecosystem for E-mobility.

As part of a restructuring effort, the business had announced in September of last year that it would halt vehicle production at its two operations in the nation. According to Tata Motors, TPEML and FIPL would collaborate over the coming months to fulfill all antecedent condition precedents and get necessary regulatory clearances for the closing of the acquisition.

Additionally, Tata Motors earlier declared that by 2025, its lineup would include 10 battery electric vehicles, some of which would be manufactured at the Sanand plant’s new location.


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