Ford India's proposed site is located next to Tata Nano's plant. The process of earmarking the land to the US auto giant has got underway, they said.
"Ford has been in discussion with the Gujarat government for setting up a manufacturing plant at an investment of nearly Rs. 5,000 crore. It has now closed in on 400 acres of land in Sanand for the facility," the state government officials said.
The District Collector of Ahmedabad has got a request from the state government to earmark 400 acres of land in Sanand, nearly 40 km from here, for Ford India, they said.
Ford has been weighing various options to set up its second manufacturing plant in India as it gears up to launch eight new models in one of the world's fastest-growing car markets.
In August last year, Ford had announced to launch eight new models in India by 2015 in a bid to tap the burgeoning domestic car market.
The introduction of the new vehicles would be part of the company's plan to bring more products from its global portfolio and other Asia Pacific and African markets.
The company has already invested $500 million to expand production capacity to two lakh units annually at its Chennai facility. It also has an engine manufacturing plant with an installed annual production capacity of 2.5 lakh units.
Ford recently announced an investment of $72 million to expand its powertrain facility in Chennai and to support its sales and export growth plans in India, bringing its total investments in Asia's third largest economy to more than $1 billion in the last one decade.
The company sold a total of 51,420 units, including overseas, in the January to May 2011 period, registering a growth of 71 per cent compared to the same period a year ago.
The auto major has reportedly started exporting the 'Figo' model to Bahrain and Kenya from this month. However, there was no confirmation from the company about this development.
Tata Motors inaugurated the mother plant of Tata Nano in Sanand last year. The plant, spread over an area of about 1,100 acres, was set up at an investment of close to Rs. 2,000 crore, after being relocated from Singur in West Bengal.
The country's largest carmaker Maruti Suzuki has also expressed interest in setting up a manufacturing facility in Gujarat, one of the most industrialised states.