Crisis forced Ford to abandon alliance with Indian Mahindra

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Crisis forced Ford to abandon alliance with Indian Mahindra

Ford Motor has abandoned plans to expand its presence in the Indian market - the concern decided not to create a joint venture (JV) with the local giant Mahindra & Mahindra, which the parties had previously agreed on in the fall of 2019.

In October 2019, Ford and Mahindra decided to create a joint venture in India to develop and manufacture new cars that would be sold in parallel under two brands. These machines were expected to be promoted both in India and in neighboring developing countries. Ford wanted to transfer its existing car factories in the cities of Chennai and Sanand to the joint venture, Mahindra wanted to invest money. The plans were to create seven new models and release up to 1.2 million vehicles per year by the joint venture. All sales of Fords in the Indian market were also to be handled by a new firm. The shares in the enterprise were intended to be distributed in the proportion of 49/51 - the majority would go to Mahindra.

The refusal of the joint venture is explained by "fundamental changes in the global economic and business conditions provoked by the coronavirus pandemic." Trends over the past year have prompted a renegotiation of investment priorities, both companies said in a statement.

In a press release, Ford also adds that it is actively analyzing its businesses around the world to achieve profit margins of at least 8%. The American concern will continue to work in India in the current format, that is, independently.

One model Ford, which was created specifically for the JV, will see the light of the day - this is a mid-size crossover under the internal designation C757 on a new platform, joint development with Mahindra. Ford C757 will begin production in 2022.

In the Indian media, Ford's refusal from the deal with Mahindra is called an alarming signal - the American concern may eventually minimize its presence in this country, similar to how it happened in Russia.

Recall that as part of the global restructuring of its business, Ford left the Russian passenger car market in July 2019. In the Russian Federation, the release of Ford models Focus, Mondeo, Fiesta, Ecosport, Kuga and Explorer was completely curtailed. The production and sale of only Transit light commercial vehicles has been preserved.

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