What comes across as the biggest news on the first day of the year, Ford Motor Company and Mahindra and Mahindra have decided to call off the joint venture that was announced in October 2019. In an official statement released by Mahindra and Ford individually, both companies have mutually and amicably decided that “they will not complete a previously announced automotive joint venture between their respective companies.”
Ford and Mahindra had originally entered into a joint venture in October 2019 where they agreed to develop, market and distribute Ford vehicles in India along with Ford and Mahindra vehicles in several other emerging markets overseas. This Ford-Mahindra joint venture would have seen as many as seven new models coming from both the brands. It also meant substantial cost savings for both the brands with regard to development, sourcing and manufacturing. At the time of the agreement, it was stipulated that Mahindra would hold a 51% controlling stake while Ford India would be a 49% stakeholder.
Also Read : Mahindra XUV500-Based Ford SUV Spotted For the First Time!
In the official statement, both the companies sited fundamental changes in the global economic and business conditions to be the reason why this joint venture was called off.
"This was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.”
One of the biggest highlights of this Ford-Mahindra joint venture was the upcoming Ford C-SUV that would have been based on the next-gen Mahindra XUV500. Ford was already far down the road with this particular model and it is likely that the company will enter into a contract manufacturing arrangement with Mahindra to build the C-SUV in its Chakan plant. Also in the pipeline was a Ford-badged Mahindra Marazzo MPV, a new Ford compact SUV as well as a Mahindra-badged Aspire EV. In all probability, these models will now be shelved but there is no clear statement from either companies as of yet.
Ford have stated that they will individually continue their operations in India as in and neither does it affect Mahindra's product plans for the future. It is only the vehicles that both the companies had planned on together that will be scrapped. And that honestly is a bummer as there were quite a few exciting vehicles to come from this joint venture, which we were really looking forward to.
Stay to tuned to IndianAutosBlog.com for the latest Ford and Mahindra updates and other four-wheeler news.