Ford Motor Company and Mahindra & Mahindra have mutually ended their discussions on the proposed automotive joint venture. In a press statement by Ford and Mahindra & Mahindra, it is stated that the two automakers have mutually and amicably determined that “they will not complete a previously announced automotive joint venture between their respective companies.”
The decision follows the passing of the Dec. 31 “longstop,” or expiration, date of a definitive agreement the organizations entered into in October 2019.
For people not in the know, Mahindra & Mahindra and Ford Motor Company had signed an agreement on October 1, 2019 for a joint venture to produce, market and sale Ford brand vehicles in India. Mahindra will have 51 percent controlling stake and Ford with 49 percent stake in the JV. It was stated that Ford will transfer all its India operations including the production units to the JV.
The JV was aimed at improving Ford share in India as well as in growing markets. On the other hand, Ford will help Mahindra to expand base in growing markets. The decision of discontinuation of the joint venture could lead to delay or cancellation of 3 new UVs, which were scheduled to be launched in the next couple of years. The first model under the new Joint Venture was the C-SUV, which will be sold under the Ford nameplate.
Commenting on the same, 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.”
The decision was taken due to fundamental changes in global economic and business conditions – caused by COVID-19 pandemic over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.
Ford confirms that its independent operations in India will continue as is. The company aims to develop and deliver high-quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford.
