The news is official! While earlier this year, there were rumours of a joint venture between Ford and Mahindra, a press release confirms the same. Ford and Mahindra will co-exist as partners. Mahindra owns a majority (51 per cent) though and will be in the driver’s seat. The joint venture will be operationally managed by Mahindra, and its governance will be equally composed of representatives of Mahindra and Ford. Both the parties will have their independent showrooms and the products will be sold through these. Under this venture, Ford India will transfer its assets including Sanand and Chennai plants to the alliance. The company though will retain its personnel and there will no job cuts.
Tell me more about the specifics of this joint venture
Mahindra has invested Rs 656 crore into this joint venture. This gives them access to Ford’s plants in India. The transaction will be completed mid-2020 post which we can see new products rolling out from both sides. In the coming years, we will see three all-new utility vehicles from Ford. These vehicles will be based on a Mahindra platform and share the engines as well. Mahindra on its own too will have a pie from these vehicles. In return, Ford will share its electric vehicle technology. It may be said that in the Indian market, Mahindra has an upper hand given that they have been selling passenger EVs here for quite sometime. Ford in the meanwhile, has global EV prowess.
Ford is also readying the Aspire EV. It is likely to have some amount of Mahindra tech to localise it. Mahindra stands to gain again when it comes to Ford’s global distribution network in emerging markets. Ford has time and again said that they are looking at more exports too.
Our take on this subject
Ford India has been ailing for quite sometime and at one point of time, they were mulling an exit. This Mahindra venture is a shot in the arm for them. Ford dealers can be rest assured that they will continue to reap profits. However, Ford India will not be so keen on expanding its outlets. New products with Mahindra DNA in them will be an irresistible combination. Moreover, customers might be able to get over the counter parts from both manufacturers. In the same vein, Mahindra has had a bad experience when it comes to JVs. The previous ones with Jeep, Renault, SsangYong, Peugeot scooters as well as few others haven’t borne any great results. Instead, Mahindra can gain from Ford’s international reach as well as EV technology expertise. All in all, we wish that this partnership succeeds for both.