It’s official now. Ford Motor Company has announced that it will build an integrated manufacturing facility comprising of a state-of-the-art vehicle manufacturing facility and an engine plant in Sanand, Gujarat. On July 28, at a ceremony held in Gandhinagar, the Industry Secretary of the State of Gujarat, M Sahu, and Michael Boneham, Ford India’s president and managing director, signed the MoU, in the presence of the chief minister of Gujarat, Narendra Modi, and Joe Hinrichs, president and CEO of Ford Asia Pacific and Africa.

Ford will invest approximately Rs 4,000 crore in the two facilities, which include stamping, body, paint and assembly operations for vehicle manufacturing, as well as machining and assembly operations for engine manufacturing. The vehicle manufacturing plant will have an initial annual capacity of 240,000 units, and the engine plant will have an initial annual capacity of 270,000 engines. Ford’s investment will also create 5,000 jobs at the new facilities which will be spread over 460 acres.

“Namaste Gujarat!” said Joe Hinrichs. “We are delighted to announce that Ford’s newest vehicle manufacturing site will be here in Gujarat. Ford has very aggressive expansion plans in India and in Asia Pacific and Africa, and these two new plants will be important in realising our growth strategy here in one of the most dynamic regions in the world.”

Construction of both plants will begin later this year, with the first vehicle and engine scheduled to come off the line in 2014. In 2010, Ford announced it would bring eight new vehicles to India by mid-decade. Ford currently has a vehicle manufacturing plant in Tamil Nadu and is expanding its engine plant there.

“This is an investment in the future of Ford globally,” said Hinrichs. “These new state-of-the-art facilities will help us reach the goal of increasing worldwide sales by nearly 50 percent by mid-decade to about 8 million vehicles per year. We are aggressively expanding in markets around the world that have the most growth potential, in order to offer more of the fuel-efficient, high-quality vehicles from our global portfolio that customers in markets like India want and value.”

Ford is bringing more than 50 new vehicles and powertrains to its Asia Pacific and Africa region by mid-decade. Sixty to seventy percent of Ford’s growth is expected to come from this region over the next ten years. “India is a dynamic and vitally important market for Ford,” said Boneham. “As part of our strategy in India, we will continue to expand vehicle and engine production, grow our dealer network, and continue to enhance our team of local talent, all while recognizing the strengths and value of our suppliers.” In his address, chief minister Narendra Modi said: “The entry of Ford Motor Company in the State will further strengthen the capability of Gujarat as an auto hub.”