Tata motors to buy Ford car making plant in India

Indian automaker Tata Motors has agreed to buy a Ford manufacturing plant in the western state of Gujarat for 7.26bn rupees ($91.5m).

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Ford stopped production in India last year after struggling for more than two decades to generate profits there.

“With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders,” Tata Motors said in a statement.

The parent company of the UK’s Jaguar Land Rover added that annual production at the Sanand plant will initially give it new capacity of 300,000 vehicles a year, which could be increased to 420,000.

The announcement marks an important step forward in Ford’s efforts to restructure its Indian business, Ford transformation officer Steve Armstrong said.

In September last year, Ford said it would close its Indian car factories as part of a move that would cost it around $2bn.

At the time, the US car maker said that about 4,000 workers would be affected by the decision.