After failed solo ride, Ford inks JV with M&M
Mumbai: Ford Motor has decided to park its struggling India business into a joint venture with Mahindra & Mahindra after the American company failed to make significant inroads into the world’s fourth largest automobile market for the last 24 years.
Ford, among the first global automakers to enter India in 1995, four years after the economic liberalisation, will cede control in its local operations as it believes “partnerships will become the norm in the industry”.
Ford, which will transfer most of its India assets to the JV, will hold 49% in the new company valued at Rs 1,925 crore, while Mahindra will own the remaining 51%. The JV, which will house Ford’s two assembly plants in Chennai and Sanand, and employees, will be managed by Mahindra while the governance board will have equal representation by both the parties.
The JV will exclude Ford’s engine plant in Sanand, global business services unit, auto finance operations and mobility services investments. “The world we are in is complex, and requires partnerships as no one can do everything,” said the American company’s chairman Bill Ford through a video conference.
While the Michigan-based automaker will continue to own the Ford brand, the JV will develop, market and distribute the Ford-badged cars in India as well as in emerging markets around the world. The JV plans to launch three vehicles, beginning with a mid-sized SUV.
Ford and Mahindra have a long history of working together — the two had joined hands to launch Ford Escort in India. However, the duo later parted ways to pursue their individual ambitions. “We are two old friends, who have decided to move into a new house and pool in resources together,” said the Indian company’s chairman Anand Mahindra.