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Ford agrees to $91 million deal for India plant with Tata Motors

Rouge Electric Vehicle Center. (Credit: Ford)

Ford will sell its vehicle production plant in India to Tata Motors, the companies confirmed in statements earlier this weekend. Ford said it plans to focus on vehicle production in the United States, where it has been ramping several new all-electric models in the company’s push to electrification.

The production facility would be sold to Tata for $91.5 million and would mark the exit of Ford manufacturing from India.

The sale follows Ford’s announcement in 2021 that would cease production at the facility. However, it is not the only facility Ford planned to part ways with. In an announcement in January 2021, the Blue Oval said would close three Brazillian plants due to poor sales and “significant losses” in the region.

India-based Tata will acquire the factory, along with all of its machinery and equipment, for 7.26 billion rupees, or roughly $92 million.

“With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders,” a representative from Tata Motors said. Bloomberg initially reported the news.

Ford CEO Jim Farley said to ABC News last September that the company’s factories in India were not profitable.

“Despite investing significantly in India, Ford has accumulated more than $2 billion of operating losses over the past 10 years, and demand for new vehicles has been much weaker than forecast,” Farley said.

While the factories were not profitable and ultimately led to Ford’s decision to close, the company also has other objectives. The closure of manufacturing plants outside of the U.S. is less about profitability and perhaps more of a rededication to U.S.-based manufacturing rather than a contraction of production overall.

Ford is already in the process of expanding its Rouge production facility and continues to construct its new Tennessee-based manufacturing location. This shift to increased domestic production could allow the brand to become more competitive in the US while also allowing the brand to exit the Indian market, where EV adoption is a fractional portion of the overall market share.

Before news of Ford selling the facility, some believed the brand was considering re-opening the plant to aid in EV production. Yet, it makes sense to focus on the U.S. market Ford has continued to grow in, especially regarding EV sales.

Ford still holds numerous foreign facilities in Turkey, Venezuela, China, Thailand, and Mexico, to name a few. However, it may become more valuable for the brand to continue to move production back to the U.S. as the White House looks to become less dependent on global suppliers.

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Ford agrees to $91 million deal for India plant with Tata Motors
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