As expected, Mahindra & Mahindra and Ford have signed an agreement to form a joint venture company that will develop, market and distribute Ford branded vehicles in India and Ford and Mahindra branded vehicles in emerging markets around the world. This new announcement builds on the earlier announcements of a strategic alliance.
Valued at INR 1,925 crores (US $270 million), Mahindra will own 51 percent controlling stake in the joint venture, while Ford will own 49 percent. In addition, Ford will transfer its India operations to the JV, including its personnel and assembly plants in Chennai and Sanand. However, Ford will retain the Ford engine plant operations in Sanand as well as the Global Business Services unit, Ford Credit and Ford Smart Mobility.
Jim Farley
Strong alliances such as this play a crucial role for Ford to compete profitably in the high-volume, affordable vehicle segments so popular with our diverse customer base. By combining our respective talents, we will offer more vehicles to more customers in more places than ever before and deliver profitable growth to both Ford and Mahindra. – Jim Farley, President of Ford New Businesses, Technology & Strategy
The joint venture will have a distinct product portfolio with shared platforms and powertrains, the newest technology, high quality and engineering standards from both Mahindra and Ford, at optimized costs. This winning combination will enable the joint venture to successfully position its vehicles in India, as well as unlock the potential of other highly competitive emerging markets. – Pawan Goenka, Managing Director, Mahindra & Mahindra
The JV will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Ford will continue to own the Ford brand, and its branded vehicles will be distributed through the current Ford India dealer network. Mahindra will continue to own the Mahindra brand and operate its own independent dealer network in India.
The JV will use Ford distribution network in emerging markets for export of Mahindra products, in addition to Ford branded vehicles. Mahindra products are exported to South Africa, Nepal, Bangladesh, Sri Lanka and Chile, among other countries.
The JV is expected to be operational by mid-2020, subject to regulatory approvals. It will be managed by Mahindra, and its governance will be equally composed of representatives from Mahindra and Ford.
The JV expects to introduce three new utility vehicles under the Ford brand, beginning with a new midsize SUV that will have a common Mahindra platform and powertrain. As announced earlier, another area of focus for the JV will be electric vehicles.
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