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Tata Ends Ford’s Expansion in India through Takeover

published: 2022-08-10 9:30

Indian auto giant Tata Motor announced today its purchase of land, plants, and equipment previously owned by Ford, who stated its shutdown of plants in India last year.

Ford had announced last year that it will be shutting down all plants in India. Executives of Ford once regarded India as one of the three major markets in the world, though no progresses were seen after years of struggle. According to statistics, Ford had made a loss of US$2 billion in the Indian market over the past decade.

Indian auto giant Tata Motor seized the opportunity by purchasing the Gujarat and Sanand plants in Western India, including land, plants, and production equipment, at a total cost of approximately US$92 million.

 “Our capacity is nearly at full load, so this transaction came timely”, stated Tata Motor, who will obtain the most advanced manufacturing technology from the new plants, and may arrive at an annual capacity of 300K units. There will also be space for capacity expansion up to 420K units.

India has always been regarded as the country full of golden opportunities amidst the drastic transformation within the global auto market, similar to what the Europeans had imagined several hundred years ago. However, European and American brands have always found it difficult to expand in this mysterious nation due to its policies, tax regulations, and culture, despite enormous demand for automobile and scooters.

Market Share Ranking among Auto Brands in India. (Source: Statista)

India produced a whopping 22 million units of automobile and scooters last year, and generated US$32.7 billion of sales from the small passenger car market. India’s enormous market has naturally attracted a number of auto manufacturers throughout the electrification process.

Maruti Suzuki occupied the largest market share in India at more than 40% in 2021, followed by Hyundai, and then Tata at third phase with more than 10% in market share. Renault accounted for the highest market share among European brands at merely 3%, while Ford, who sold its plants, only sat at 0.7%.

Whether Tesla, who is constantly rumored to be stationing in India, can subvert this local market that is almost dominated by Asian auto brands, has become one of the worthy focuses for the second half of 2022.

 (Cover photo source: Tata Motor)

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