Tata Motors, the electric passenger vehicle market leader, has just announced its intent to further up the ante with yesterday’s announcement by its EV arm – Tata Passenger Electric Mobility – to buy Ford’s plant in Sanand, Gujarat for Rs 726 crore.
The carmaker will now be armed with ample future manufacturing capacity. The acquisition of Ford’s Sanand plant will unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum. In its statement yesterday, Tata Passenger Electric Mobility said it “would make the necessary investments to reconfigure the plant to adapt to Tata Motors' existing and future vehicle platforms. The unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles at Sanand, which should help in a smooth transition.”
Tata will look to enhance drive manufacturing flexibility at Ford plant
At Rs 726 crore, Tata Motors has acquired Ford’s Sanand plant at a throwaway price given that the American carmaker had invested close to a billion dollars in the integrated vehicle and engine manufacturing plant. The two facilities include stamping, body, paint and assembly operations for vehicle manufacturing, as well as machining and assembly operations for engine manufacturing.
However, being a highly automated plant with a high break-even manufacturing volume, what Tata Motors will have to reconfigure operations to ensure a high level of manufacturing flexibility to meet future demand for both IC engine and electric vehicles in the market.
What will be key to Tata Motors’ success with Ford’s Sanand plant will be ensuring speedy and seamless flexibility to handle unpredictable market swings. It is understood that it will take a year for Tata to retool the plant, which will be ready for a new generation of EVs like the Curvv midsize SUV which, though based on the modified Generation-1 architecture found on the Nexon EV, has been designed to accommodate multiple body styles and powertrain options.
EV portfolio expansion on the cards
Tata Motors, which at present has three models– the Nexon EV, Tigor EV and fleet-only XPres-T EV – is looking to aggressively expand its EV portfolio. It is understood that there are 10 new EVs to be added in the next few years as the company looks to increase its EV presence and also keep new competition at bay. As is known, Mahindra & Mahindra is all set to unveil five new electric SUVs on August 15, 2022.
Tata Motors is firing on all cylinders at the present moment – in July 2022, it notched its highest-ever dealer despatches at 47,505 units, up 57% (July 2021: 30,185) comprising 43,483 ICE PVs (July 2021: 29,581 / +46%) and 4,022 EVs, up 565% (July 2021: 604 units).
In Q1 FY2023, Tata Motors saw month-on-month increase in demand and its retail sales were just two units shy of the 7,000-unit mark. Wholesales in the April-June 2022 period were 9,283 units, which means the company has kept its showrooms well stocked with its EV machines.
As per the latest electric PV retail numbers (above) released by FADA president Vinkesh Gulati, Tata Motors has sold 9876 units in the April-July 2022 period, which makes for average monthly sales of 2,469 units. Tata is also seeing month-on-month growth in its EV sales – from 1,802 units in April to 2,487 units in May, 2,709 units in June and 2,878 units in July.
Tata, which is gunning for overall PV sales 500,000 units this fiscal, is targeting EVs to have 10 percent of that – going to 50,000-unit sales from the 19,105 units sold in FY2022 translates into 161 percent growth. Its market performance in the first four months of FY2023 holds a candle and more to that goal.