US car-maker Ford, which has a major vehicle plant in Tamil Nadu, has announced it will invest $1 billion in Gujarat to build two new plants.
However, the decision does not seem to have upset or surprised the Tamil Nadu government which had courted the company to set up the new plants there, IANS reports.
"We have been told that the company would save sizeably on freight costs if it has a plant in Gujarat as it can cater to the northern markets," a state government official said.
Ford is also to invest $72 million to expand its engine plant located near Chennai to take the annual production capacity to 330,000 units from the current 250,000.
Ford currently also has a vehicle plant near Chennai with a capacity to roll out 200,000 units per year.
Ford’s new vehicle plant in Gujarat will have an initial annual capacity of 240,000 units, and the engine plant will have an initial annual capacity of 270,000 engines.