Gandhinagar, July 28 (IANS) US automobile major Ford will invest $1 billion (Rs.4,000 crore) to manufacture cars and engines at an integrated facility at Sanad in Gujarat, generating 5,000 jobs, the company announced Thursday.

Ford has entered signed a memorandum of understanding (MoU) with the Gujarat government to construct the facility, a company statement said. The construction of both the plants will begin later this year, with the first vehicle and engine scheduled to come off the line in 2014, it added.

"We selected Gujarat because of its pro-business environment, infrastructure, access to ports in northwestern India and skilled workforce," said Joe Hinrichs, president and chief executive, Ford Asia Pacific and Africa regions.

"The facilities (will be used for) stamping, body, paint and assembly operations for vehicle manufacturing, as well as machining and assembly operations for engine manufacturing," the statement said.

"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," the statement said.