Ford, Mahindra to join forces

FORD Motor Co and Indian vehicle maker Mahindra and Mahindra Ltd are looking at teaming up again for a new strategic alliance.

In a joint announcement, the vehicle manufacturers said the potential alliance would explore cooperation in areas like connected cars and electric vehicles and sourcing, among other things.

This is the second time the two will be joining forces in India.

Ford re-entered India in the 1990s through a joint venture with Mahindra before eventually expanding to manufacture and sell vehicles on its own.

The new alliance comes as foreign car makers like Fiat Chrysler, Volkswagen and General Motors struggle in India where nimbler rivals such as Maruti Suzuki and Hyundai Motor have cornered about two-thirds of the market.

In May, General Motors said it would stop selling cars in India at the end of this year after 20 years battling in one of the world’s most competitive markets, where small cars make up the bulk of sales.

Mahindra and Ford said their prospective alliance would give Ford access to Mahindra’s distribution network in India while Mahindra would benefit from Ford’s market reach in other developing economies.

“Teams from both companies will collaborate and work together for a period of up to three years.

“Any further strategic cooperation between the two companies will be decided at the end of that period,” Ford and Mahindra said.

The alliance follows an outline deal announced in February between Toyota Motor Corp and Suzuki Motor Corp, whereby Toyota is expected to benefit from a supply chain that has helped Suzuki dominate India’s market, while Suzuki hopes to draw on Toyota’s innovations in automated driving, artificial intelligence and low-emission vehicles.

Manufacturers worldwide are in the throes of deciding how best to adapt to changing technologies, from electric vehicles to autonomous driving, which require hefty investment and have created new rivals, such as Alphabet Inc’s Google and Tesla.

“There are definitely some very good synergies in these two companies coming together,” Kaushik Madhavan, director, automotive, at consulting firm Frost and Sullivan, said.

“It all now depends on how they are able to share their platforms and how they leverage each other’s capabilities going forward.”

“The overall long-term roadmap however, is still unclear.”