If you have been led to believe that Ford is exiting India, then you need a reality check. What the American carmaker has decided is to combine its forces with those of Mahindra to form a joint venture. Valued at Rs 1,925 crore, the JV could go operational by mid-2020. Mahindra will hold a 51 per cent controlling stake and Ford will carry the remainder. Mahindra will operationally manage the new company. However, the pool of decision makes will comprise of both Ford and Mahindra personnel.
For both the companies, the main idea behind the creation of the JV is to utilise each other’s strengths and build upon them in India and abroad. What will happen to Ford’s assets in India? The venture in-the-making will get Ford’s India operations, including personnel and assembly plants in Chennai and Sanand. However, the Detroit-based carmaker will retain its engine plant operations in Sanand along with Global Business Services unit, Ford Credit and Ford Smart Mobility.
What will the JV do for both companies? In India, it will develop, market and distribute Ford brand vehicles. In emerging markets around the globe, the new company will do the same for both the brands. More significantly, the collaboration will enable both automakers to offer new products at a rate faster than before. That should help them keep pace with market leaders such as Maruti Suzuki and Hyundai.
Ford’s International Market Group business unit, tailored to help emerging markets, will swing in to establish the upcoming venture. As revealed earlier this year, the JV will kickstart the proceedings with a mid-size SUV under the Ford brand. The model will share Mahindra’s platform and powertrain with other similarly sized personal cars. After that, an electric vehicle is also in the pipeline. Ford and Mahindra also shook on developing connected car technologies for India.
What's your reaction?
