The new joint venture carries strategic importance for both the brands as three new Ford SUVs are in the pipeline
Mahindra and Ford have announced that a new JV has been created under a definite agreement in order to develop, market and distribute Ford branded vehicles in India while Ford will assist Mahindra in the emerging markets across the globe. Mahindra will own 51 per cent controlling stake in the JV while the remaining 49 per cent is for Ford.
More importantly, Ford will transfer its India operations to the joint venture and it includes personnel and assembly Chennai and Sanand plants. However, Ford will retain its
engine plant operations in Sanand alongside Global Business Services unit, Ford Credit and
Ford Smart Mobility.
The long rumoured JV has finally been revealed officially and it all stems back to the initial agreements signed by both the brands back in September 2017. The positive movements have led to the JV becoming operational expectedly by the middle of next year and is subjected to regulatory approvals.
While the JV will be operational by Mahindra, the governance will comprise of representatives from both the companies. The joint venture will also help in the growth of the Ford brand in the domestic market while exports will also play a major role.
It has been noted in the statement that Ford will continue to run the brand and its branded cars will be distributed under its existing dealership network. As part of the JV, three new UVs under Ford brand will be introduced and it includes a new mid-size SUV having several commonalities with Mahindra’s product platform and powertrain.
Another project that will be undertaken is for EVs as Mahindra and Ford will partner to develop zero-emission vehicles for emerging markets. With greater economies of scale in areas such as sourcing, product development and access to relevant technologies, the JV is expected to consolidate the Ford brand in India.
The joint venture is valued at Rs. 1,925 crore (USD 275 million) and it will aid in using Ford network to extend support for export of Mahindra products globally. Ford’s new International Markets Group (IMG) business unit will play an integral part in the process and it brings together 100 emerged and emerging markets including India, Australia, ASEAN, Middle East, Africa and Russia.