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Ford is planning to end its independent operations in the Indian market. The American brand which has been in the country for over two decades might soon stop its India business. However, the company will remain in India through a new joint venture with Mahindra.
According to Reuters, Ford and Mahindra will form a new unit wherein the American brand will hold 49 percent stake while Mahindra holds the remaining 51 percent. According to the reports, Ford will transfer all its assets and employees from the current business to the new entity.
The deal between the two companies and confirmation regarding Ford's India exit is said to be finalised in the next 90 days. However, the value of the transaction has not been disclosed.
Both companies have also stayed away from comments regarding the new joint venture between them. Ford only mentioned that both companies will work together to develop areas of strategic cooperation, which will help both businesses. Mahindra, on the other hand, released a statement saying that they are working on certain identified areas and will announce further agreements, once there is confirmation.
Ford was one of the first international brands to enter the Indian market. The American brand has been in the country for over 20 years and invested over $2 billion USD in the Indian market. However, even with the huge investments, the company holds only a minimal 3 percent market share.
Although its domestic sales has been low, selling an average of 7,000 units a month. Ford has become one of the largest car exporters in the country. The brand manufactures its products in two facilities in Chennai and Sanand.
Ford had already announced previously that they have no plans of introducing new products in the Indian market. Ford said it would only concentrate on facelifts and updates of its current portfolio.
As part of the new joint venture between Mahindra and Ford, they will launch their first product sometime in 2020. The first product will be an SUV while the joint venture will also look into the technologies for electric vehicles as well.
Thoughts On Ford's Exit From India And Their Joint Venture With Mahindra
Ford has been in the Indian market for almost 20 years and is also one of the first international brands to enter the country. If Ford does decide to stop its independent business in India, it will be the second brand to exit the market, after General Motors.