Ford-Mahindra Joint venture has confirmed by both parties to not come into effect citing “fundamental changes in global economic and business conditions”
It is just the first day of the New Year and we have all sorts of drama going around already! The relationship between Ford and Mahindra has been considered to be a major milestone in the Indian automotive industry in recent times but they have ended their Joint Venture discussions much to the surprise.
The previously announced JV won’t come into fruition as both the brands have officially stated so in the final moments of 2020. It comes on the back of them failing to meet a definitive agreement within the said time period of December 31, 2020. The companies announced their desire to explore into new opportunities back in late 2017 as Mahindra’s local presence and Ford’s global expertise would be leveraged for benefitting one another.
Subsequently, back in October 2019, M&M and Ford came together for a JV with mutual benefits in mind and to take advantage of each other’s strengths in various field. The Joint Venture company was said to have 51 per cent controlling stake for Mahindra and the remaining 49 per cent for the American auto major.
More importantly, Ford was supposed to transfer its assets in the domestic operations. It included the production facilities in Chennai and Sanand to Mahindra while its retail sales activities, engine plant in Sanand and a few other divisions will remain under its belt.
The homegrown passenger UV specialist further stated that the decision would not impact its product plans as it is “well positioned in its core true SUV DNA and product platforms with a strong focus on financial performance”.
It also reiterated its intentions to “establish leadership in Electric SUVs”. The JV could not come into effect due to the “fundamental changes in global economic and business conditions” as they will reevaluate their respective capital allocation priorities. Ford will continue to be independent in India and it will be interesting to see what will happen to the proposed C-SUV based on next-gen Mahindra XUV500’s platform along with engine sharing and a lot more in the grapevine.