Mahindra & Mahindra tweeted about the major announcement with the US-based auto company.
Ford and Mahindra have announced a joint venture in which both the carmakers will develop and sell vehicles in India as well as in the global markets.
The two companies have for months been negotiating the deal which will see Ford take a 49 per cent stake in the new entity and end most of its independent local operations in the country. Ford will retain its engine plant in Sanand and some of its business operations relating to other divisions, such as Ford Credit and Ford Smart Mobility. The joint venture is expected to be operational mid-2020 post regulatory clearances. The JV will be operationally led by Mahindra, while its governance will be equally composed of representatives from Mahindra and Ford.
Mahindra & Mahindra has chose to purchase 51 percent of long-time ally Ford's India business. The plants are located in Chennai in Southern India and the other in Sanand in Gujarat. Mahindra says this JV will help bring together operations of both companies in over 100 high-potential emerging markets including Australia, Africa, Russia, and the ASEAN and Middle-east regions.
Mahindra is the largest producer of utility vehicles in India. However, Ford will continue to own the Ford brand, and its branded vehicles will be distributed through the current Ford India dealer network.
That will be followed by two yet to be approved products, which will be based on Ford's B-Segment platform and will be made in Ford's plant in Chennai or Sanand, for Ford and Mahindra.
UAW schedules strike vote as negotiations with General Motors continue
The strike by about 49,000 factory workers has shut down production at more than 30 GM factories. GM immediately shifted responsibility for the health insurance to the union's strike fund.
"Emerging economies including India are expected to account for one in three future vehicle sales", said Dr. Pawan Goenka, managing director, Mahindra & Mahindra.
In addition to the established Ford Ranger and USA import businesses in IMG, the formation of this joint venture will add to IMG's portfolio vehicles specifically tailored for emerging markets, and it places India very much at the centre of Ford's strategy for IMG. Ford and Mahindra will collaborate to develop vehicles to support the growth of sustainable mobility across emerging markets.
Ford has also executed a significant alliance with Volkswagen to share the costs of electric cars, commercial vehicles and developing autonomous vehicles.
Ford and M&M had in September 2017 inked a pact to explore a strategic alliance covering areas like product development, electric vehicles and distribution in India and emerging markets. The JV expects to introduce three new UVs under the Ford brand starting with a new mid-sized sport-utility vehicle, which will share the vehicle platform and engine with M&M.
Ford's move is aligned with its global strategy to mitigate risks by withdrawing from tough markets where it has failed to successfully grow profits over time.
Michigan-based Ford has a share of just about 3% in a market dominated by Asian vehicle makers including Suzuki Motor Corp and Hyundai Motor Co that together control two-thirds.
Comments