Tata Motors to take over Ford in India

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

The acquisition is timely and a win-win for all stakeholders with our manufacturing capacity nearing saturation, Tata Motors said in a statement.

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

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

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

The company wanted to make the country one of its biggest markets, but the major scaling back in its Indian operations was in stark contrast to the company's previous ambition to make it one of its biggest markets.

Demand for Indian cars has gone up, according to some Indian car makers. One of Tata's rivals Mahindra and Mahindra said on Friday that demand for its vehicles was out of production as people rushed to buy its popular sport-utility vehicles.

The company's passenger vehicles sales rose to 74% from a year ago, helping boost its quarterly profits.

Rajesh Jejurikar, Mahindra and Mahindra's executive director, said that they had kicked off capacity expansion programmes but had not anticipated this kind of demand.

In 2008, Tata Motors bought Jaguar and Land Rover from Ford and merged the British luxury car brands into a single company.