Ford has given its lagging Indian operations a boost by reuniting with local sport utility vehicle maker Mahindra to explore electric cars and new technologies.
Ford gave its lagging Indian operations a boost by reuniting with local sport utility vehicle maker Mahindra to explore electric cars and new technologies, as the US company tries to gain a foothold in a country that is set to become the world’s third-biggest car market.
Ford and Mahindra have formed a partnership for three years, aiming to co-operate in areas including mobility programmes, connected vehicle projects, electrification and distribution within India, improving Ford’s reach in the country, the vehicle makers said on Monday. The companies parted ways in 2005 from a venture that mostly made sedans.
The development is an about-turn for Ford after previous CEO Mark Fields put the business in India under review. Jim Hackett, who became CEO after Ford’s board ousted Fields in May, has now found a way to stay in India while sharing costs with Mahindra on product development and sourcing.
In May, General Motors announced it was stopping sales in the Indian market.
“Ford is committed to India, and this alliance can help us deliver the best vehicles and services to customers while profitably growing in the world’s fifth-largest vehicle market,” said Jim Farley, Ford executive vice-president and president of the global markets division.
The Indian plan is one of the most significant Ford has made in the first four months under Hackett, who said he would conduct a 100-day review of Ford’s business. The former CEO of office furniture maker Steelcase is scheduled to lay out his strategy to investors on October 3 in New York.
SUZUKI, HYUNDAI
Ford re-entered India in the mid-1990s, when the country opened its car market for foreign investment, by partnering with Mahindra. The companies set up a factory near the southern city of Chennai and started making the Escort sedan.
Ikon, Fusion, Fiesta, Figo and other models followed, but nothing gave the US-based car maker the success of Suzuki and Hyundai in India.
Ford had a domestic market share of 3%, while Mahindra had 7.75% in the financial year ended-March 2017, according to the Society of Indian Automobile Manufacturers. Suzuki was number one, with 47% and Hyundai second, with 16.7%.
While Ford shares have increased modestly since the company changed CEOs, the stock is still down 4.2% in 2017, trailing General Motors and the benchmark S&P 500 index.