Mahindra & Mahindra Limited and Ford Motor Company have signed a definitive agreement to create a joint venture that will develop, market and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets around the world.
Mahindra and Ford will form a joint venture, with Mahindra owning a 51 percent controlling stake and Ford owning a 49 percent stake. Ford will transfer its India operations to the joint venture, including its personnel and assembly plants in Chennai and Sanand. Ford will retain the Ford engine plant operations in Sanand as well as the Global Business Services unit, Ford Credit and Ford Smart Mobility.
The joint venture is the next step in the strategic alliance forged between Ford and Mahindra in September 2017 and is expected to be operational by mid-2020, subject to regulatory approvals. The joint venture will be operationally managed by Mahindra, and its governance will be equally composed of representatives of Mahindra and Ford.
The joint venture will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Ford will continue to own the Ford brand, and its branded vehicles will be distributed through the current Ford India dealer network. Mahindra will continue to own the Mahindra brand and operate its own independent dealer network in India.
“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,” said Anand Mahindra, Chairman, Mahindra Group.
“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,” said Bill Ford, executive chairman, Ford Motor Company.
“At Ford, our purpose for 116 years has always been to drive human progress, and that won’t change. But to continue to do that, we need to evolve with new and faster ways of not only delighting our customers around the world but also solving their very different needs. Strong alliances like this play a crucial role in assuring we continue to achieve our vision while at the same time staying competitive and delivering value to our global stakeholders,” said Jim Hackett, Ford president and CEO.
The joint venture expects to introduce three new utility vehicles under the Ford brand, beginning with a new midsize sports utility vehicle that will have a common Mahindra product platform and powertrain.
Another area of focus for the joint venture will be electric vehicles. Ford and Mahindra will collaborate to develop vehicles to support the growth of sustainable mobility across emerging markets.
“Emerging economies including India are expected to account for one in three future vehicle sales,” said Dr. Pawan Goenka, Managing Director, Mahindra & Mahindra Limited. “The joint venture will have a distinct product portfolio with shared platforms and powertrains, the newest technology, high quality and engineering standards from both Mahindra and Ford, at optimized costs. This winning combination will enable the joint venture to successfully position its vehicles in India, as well as unlock the potential of other highly competitive emerging markets”.
“The creation of this joint venture is a pivotal moment in both our companies’ histories. Strong alliances such as this play a crucial role for Ford to compete profitably in the high-volume, affordable vehicle segments so popular with our diverse customer base. By combining our respective talents, we will offer more vehicles to more customers in more places than ever before and deliver profitable growth to both Ford and Mahindra,” said Jim Farley, president of Ford New Businesses, Technology & Strategy.
It may be recalled that when Ford entered India they had a tie up with Mahindra as Mahindra Ford India Limited in 1995 as a 50:50 joint venture, Later Ford went solo. Mahindra now owns 51% while Ford owns 49% stake in this new JV that was signed today.