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Tata Motors Purchased Ford’s Indian Factory

Tata Motors Plans to Sell 50,000 EVs
Photo Courtesy: The Hindustan Business Lines

Tata Motors is buying a Ford car factory in the Western Indian state of Gujarat. This acquisition will be completed for $91 Million. However, an agreement was reached between the two organizations. The report says that the Indian company has taken this initiative to increase the production of cars in line with the demand. But on the other hand, US car makers are leaving India to avoid losses. Tata’s electric vehicle subsidiary and Ford’s deal includes the Indian unit’s land, machinery, and all qualified employees. So, the article is about Tata Motors Purchased Ford’s Indian Factory.

Ford halted production in 2021 after struggling to make a profit in the Indian market for more than two decades. Their share in the country’s vehicle market was less than 2 percent. The loss in the last decade was $2 billion. A statement issued by Tata Motors said, “The acquisition is timely and beneficial for all parties. UK-based Jaguar Land Rover’s parent company Tata has an annual car production capacity of three lakh units, which can be increased to 420,000 units. Ford official Steve Armstrong said this is an essential step in the company’s efforts to restructure its Indian business.

In September 2021, Ford announced that it will close its Indian car factories. It will cost 200 million dollars. Four thousand workers were at risk of losing their jobs due to this decision. Foreign companies were considering India as one of the world’s markets. But Ford’s backlash belies that ambition. Especially foreign car manufacturers are struggling to succeed in the country’s market. In recent years, General Motors and famous motorcycle maker Harley Davidson have stopped production in India. Earlier in 2022, Japanese company Nissan decided to drop its small car brand Datsun due to low sales. India is still seen as a potential car market. But sales are now the lowest in a decade due to slowing economic growth, a weak labor market, high fuel prices, and the pandemic.

For half a decade, car demand in India has been stuck at 3 million annually. On the other hand, more than two million cars are sold annually in China. However, some Indian automakers have picked up demand. Recently, Tata’s rival Mahindra & Mahindra said demand for its cars is outstripping production. So now people are turning to popular sports-utility vehicles or SUVs. In the first quarter of this year (January-March) of 2022, their demand for passenger cars increased by 74% over the year 2021.

Tata Motors is the car manufacturing division of the Indian conglomerate Tata Group. They bought UK luxury car brands Jaguar and Land Rover (JLR) from US company Ford in 2008. This time the Indian company took over Ford’s Indian factory.

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