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Indian auto manufacturer Mahindra & Mahindra Limited and American automaker Ford Motor Company has announced a joint venture in India and other emerging markets around the world. The joint venture is expected to be operational from mid-2020.
The joint venture between two automakers will see Mahindra owning a 51 percent controlling stake and Ford owning a 49 percent stake. Ford's personnel and assembly plants in Chennai and Sanand will be handled by both companies, as a part of the venture.
However, the American auto manufacturer will retain its engine plant in Sanand. Ford will also retain the Global Business Services unit, Ford Credit and Ford Smart Mobility as well. The strategic alliance was first forged between Ford and Mahindra back in September 2017, the joint venture between two companies is the next-step toward the partnership.
The joint venture will help Ford to grow the brand in Indian market. The venture will also help the Ford to export its products built in India to other markets across the globe. Indian operations with both brands will function like before by having its own dealer network across the country.
Anand Mahindra, Chairman, Mahindra Group, said,
"Mahindra and Ford coming together is a testament to the long history of cooperation and mutual respect between the two companies. 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," he added.
Under the new venture, Ford will introduce three new utility vehicles, starting with a new mid-size SUV that will share Mahindra's platform and powertrain. The new venture will also work towards electric mobility to support the growth of sustainable mobility.
Bill Ford, executive chairman, Ford Motor Company, said,
"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. 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."
Mahindra will draw benefits from the Joint venture by using Ford's distribution network in emerging markets to extend support for export of its products. The joint venture is expected to achieve enhanced efficiencies for both the brands by sharing the product development and new technologies with each other.
Thoughts About The Mahindra-Ford Joint Venture
With the current auto slowdown in India, this venture could see both the brands helping each other to drive more sales by introducing newer models to the market. The venture will also help both the brands to develop products faster with technology sharing as well. This venture will help Mahindra to strengthen its global operations as well.