Tata Motors keen to buy Ford plants in Tamil Nadu and Gujarat

Tata Motors is looking at a possible acquisition of Ford India units at Maraimalai Nagar in Chennai and factory at Sanand Gujarat, multiple sources say. Ford’s manufacturing facilities will augment Tata Motor’s capabilities in the automotive industry.Tata

The Ford India deal, which is at a nascent stage as per ToI, comes after Tata Motors separated its domestic passenger vehicle business, valued at about Rs 9,420 crore into a standalone entity.

Rumors of the deal in Tamil Nadu became stronger after reports about Tata Sons Chairman N Chandrasekaran meeting with Chief Minister MK Stalin and state industries minister Thangan Thennarasu.  Sources believe this was the second round of high-level talks that took place within a span of two weeks. Girish Wagh, Tata Motors executive director had met the CM on September 27.

A source told ET that since the chief minister chaired those talks, the announcement regarding the final decision too would come from the CM himself. A Tata spokesperson confirmed that Chandrasekaran had a courtesy meeting with the Tamil Nadu chief minister, but added that everything else was speculation.

It should be noted that Tamil Nadu is keen to find an owner for Ford’s facility in the state, in an effort to protect jobs, as the American carmaker has decided to stop making cars in India. The Maraimalai Nagar plant has an annual production capacity of 200,000 vehicles and 340,000 engines. It manufactured the EcoSport and Endeavour which were exported to over 30 countries. The US carmaker had invested more than $1 billion in the plant.

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Ford took the step after accumulated losses of its India unit crossed $2 billion over the last 10 years and the road to profitability continues to remain hazy. “We continue to explore possible alternatives for our manufacturing facilities and have nothing further to comment on the ongoing speculation,” a Ford spokesperson said.

According to the Federation of Automobile Dealers’ Association, Ford has about 170 dealer partners in India and they collectively operate about 400 showrooms, employing thousands of people across sales and after-sales service lines. The carmaker was in talks with companies like Ola and Mahindra&Mahindra over the plant, but it fell through.