A new joint venture, scheduled to be operational by mid-2020, was unveiled today by Mahindra and Ford, which will see both carmakers co-develop, market and sell vehicles in India and other developing markets around the world. Via a video call, Ford chairman Bill Ford addressed the media gathering in Mumbai and said Ford would continue to create vehicles for India in India.
This latest JV, priced at Rs 1,925 crore, would give a combined Indian market share of 14 percent to Mahindra and Ford, according to both firms. Together the two firms will have an annual manufacturing capacity in India of 1.2 million vehicles.
In this proposed joint venture, Mahindra will hold a 51 percent majority interest, with Ford holding 49 per cent. Mahindra will operationally lead the JV, while its administration will be evenly comprised of Mahindra and Ford leaders. Ford will shift its activities in India to the new company established under this JV, including its staff and assembly plants in Chennai and Sanand. That said, as well as the Global Business Services unit, Ford Credit and Ford Smart Mobility, it will maintain its engine plant operations at Sanand.
Terming the decision to enter a JV with Ford as an effort by the two firms, Pawan Goenka, MD, Mahindra & Mahindra, to exploit the ‘best of the best’ agreed that there will not be a joint brand, but both companies will continue to have their own name in our market. Both Ford and Mahindra will continue to retail their vehicles through their respective dealer networks but will exploit the capabilities of each other in a variety of fields, such as the co-development of new models, led by Anurag Mehrotra, Ford India MD.
Seven new models, including three new Ford utility vehicles, will come from this JV, starting with the C-SUV we talked on in 2018. The upcoming C-SUV will be designed by Mahindra and will be a W601 derivative, basically the XUV500 of the next generation. Mahindra, SsangYong and Ford will co-develop the platform of the W601 and the vehicle produced will be placed above the Hyundai Creta. Mahindra’s next-generation, BS6-compliant, 2.2-litre diesel engine will fuel this Ford C-SUV. While the Mahindra W601 will share much of its core elements, the Ford edition of the car will have an all-new exterior, a new interior and even a somewhat different (and enhanced) frame. Insiders are saying, “It’s going to drive like a Ford.”
The remaining two UVs have yet to be signed off but both will be built by Ford. A brand-new compact SUV is supposed to be one of them, either based on the SsangYong Tivoli (Mahindra’s S201) or Ford’s own Vitara Brezza rival (codename: B763), which is currently being produced. However, the Ford and Mahindra/SsangYong SUVs will sport distinct ‘top hats’ and look very distinct.
For this latest joint venture, electric vehicles are also on the list, with Mahindra has already announced that it is currently working on a Mahindra-badged electric version of the Ford Aspire, which is due for launch in 2021. Collaboration and sharing of powertrains will also take place, beginning with the Ford EcoSport, which will feature Mahindra’s 1.2-litre turbo-petrol engine instead of the 1.0-litre EcoBoost in 2020; the latter unit will be phased out before BS6 specifications are rolled out.
In addition to co-developing new products, the JV will export Mahindra cars and SUVs in addition to Ford vehicles by leveraging the Ford brand distribution network in emerging markets. Mahindra says this JV would help bring both companies’ activities together in more than 100 high-potential emerging markets, including Australia, Africa, Russia, ASEAN and the Middle East areas.
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