Mahindra and Ford create a new joint venture; MG Hector, Kia Seltos rival is on the charts
In what is one of the biggest announcements of the year in the automotive sector, Mahindra and Mahindra Ltd. and Ford Motor Company have signed a definitive agreement to create a joint venture. This joint venture will develop, market and distribute Ford vehicles in India and Ford and Mahindra vehicles across emerging markets in the world.
New Ford cars lined-up for India
Valued at Rs 1925 crores, the JV primarily aims at optimized sourcing, product development, and use of relevant technologies to produce competitive vehicles while also establishing a solid global network. In fact, the JV has already announced three new utility vehicles under the Ford brand beginning with a Kia Seltos and MG Hector rival in the mid-size SUV segment. This vehicle will sport a common Mahindra product platform and powertrain. Electric mobility too is a focus for this JV and Mahindra and Ford will collaborate to develop EVs and EV infrastructure in India and across emerging markets.
Mahindra to hold majority stake in the JV
Mahindra will hold a 51 per cent controlling stake in the JV and Ford will own a 49 per cent stake. The American marque’s India operations will be transferred to the JV, including its personnel and assembly plants in Chennai and Sanand. What stays with Ford however is its engine plant operations in Sanand, Global Business Services unit, Ford Credit and Ford Smart Mobility. The JV will be operational by mid-2020, subject to regulatory approvals.
Commenting on the historic partnership between the two automotive giants, 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.”
Bill Ford, executive chairman, Ford Motor Company quoted “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.”