Mahindra & Mahindra Limited and Ford Motor Company have signed an agreement to create a joint venture that will develop, market and distribute Ford brand vehicles in India. The same will also be done for both vehicle brands in high-growth emerging markets around the world.
The joint venture will see Mahindra owning a 51 per cent controlling stake and Ford owning the remaining 49 per cent. Ford will transfer its India operations to the joint venture, including its personnel and assembly plants in Chennai and Sanand. Ford will retain its engine plant operations in Sanand as well as the Global Business Services unit, Ford Credit and Ford Smart Mobility.
The joint venture is expected to be operational by mid-2020, dependent on regulatory approvals. The joint venture will be operationally managed by Mahindra and will be equally composed of representatives of both companies.
Ford branded vehicles will be distributed through the already established India dealer network and Mahindra will continue to operate its own independent dealer network in India.
“Mahindra and Ford coming together is a testament to the long history of cooperation and mutual respect between the two companies,” said Anand Mahindra, Chairman of Mahindra Group. “Our combined strengths, Mahindra’s expertise in value-focused engineering and its successful operating model, and Ford’s technical expertise, global reach and access to future technology, are a potent recipe for success. At its core, the partnership will be driven by the shared values of both companies, which are focused on caring for our customers, associates and our communities.”
“Ford and Mahindra have a long history of working together, and we are proud to partner with them to grow the Ford brand in India,” said Bill Ford, Executive Chairman of Ford Motor Company. “We remain deeply committed to our employees, dealers and suppliers, and this new era of collaboration will allow us to deliver more vehicles to consumers in this important market.”
“At Ford, our purpose for 116 years has always been to drive human progress, and that won’t change,” said Jim Hackett, Ford President and CEO. “But to continue to do that, we need to evolve with new and faster ways of not only delighting our customers around the world but also solving their very different needs. Strong alliances like this play a crucial role in assuring we continue to achieve our vision, while at the same time staying competitive and delivering value to our global stakeholders.”
The joint venture expects to introduce three new utility vehicles under the Ford brand, beginning with a new midsize sports utility, while another area of focus will be electric vehicles.
Exports today form about 7 per cent of Mahindra’s vehicle business revenues and its products are exported to South Africa, Nepal, Bangladesh, Sri Lanka and Chile, among other nations and areas.
“Emerging economies including India are expected to account for one in three future vehicle sales,” said Dr. Pawan Goenka, Managing Director, Mahindra & Mahindra Limited. “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 optimised 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.”
“The creation of this joint venture is a pivotal moment in both our companies’ histories,” said Jim Farley, President of Ford New Businesses, Technology & Strategy. “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.”
Ford said its newly established International Markets Group (IMG) business unit brings together 100 high-potential, emerged and emerging markets including India, Australia, the ASEAN, the Middle East, Africa and Russia.