Ford Mahindra Joint Venture Called Off
Ford Motors Company and Mahindra & Mahindra have mutually decided to call off the proposed joint venture (JV) that was announced in October 2019. The American carmaker Ford will continue its solo business operations in our country.
Reason behind termination of Ford-Mahindra Joint Venture
As per the statements by both the companies, the JV has been ended due to fundamental changes in global economic & business conditions that arose by the COVID-19 pandemic. Those changes led both brands to re-evaluate their respective capital allocation preferences.
What was Ford-Mahindra JV?
Ford and Mahindra, both brands had signed an agreement on 1st October 2019 to create a joint venture to develop, sell, & market the Ford products in India. The JV aimed to build collaboration, share costs, and get a larger product portfolio via sourcing & manufacturing the products. Under this JV, Mahindra was having 51% of the total stack, and Ford was meant to transfer its Indian operational management to Mahindra, including its personnel and assembly plants. However, Ford was to retain its engine plant operations in Sanand along with the Global Business Services unit and credit & smart mobility services.
Under this JV, a total of 7 cars were intended to launch. However, in the initial phase, three different SUVs were planned to launch from Mahindra to share Ford badges as well. Strategically, these SUVs were projected to underpin Mahindra-developed platforms & engines, however, these cars were expected to have different designs for both the brands. A small electric car was also under consideration. Apart from sharing the techs, platform & powertrains, Ford was meant to support Mahindra with its manufacturing & distribution network in global emerging markets.
Official comments: –
Commenting on the called off, Mahindra & Mahindra said-
This decision will not have any impact on the company’s product plan. It is well positioned in its core true SUV DNA and product platforms with a strong focus on financial performance. In addition, the company is accelerating its efforts to establish leadership in Electric SUVs.
What will happen to the upcoming XUV500-based Ford SUV?
We all know that Ford is working on the Mahindra XUV500-based SUV. It was also spied last month. Though Ford hasn't shared any official details regarding this, we believe that the American auto giant might make a contract with Mahindra to build this upcoming SUV in its Chakan plant. Ford could also source engines from Mahindra for their upcoming cars.