Ford and Mahindra likely to sign the Joint Venture in India

BusinessFord and Mahindra likely to sign the Joint Venture in India


Ford Motor Co and Mahindra & Mahindra are likely to sign a deal next week to form a joint venture in India, two sources told Reuters, in a move that will see the US carmaker end most of its independent operations in the country.

The two companies have for months been structuring the deal to create a new entity in which Ford will hold a 49 per cent stake, while Indian rival Mahindra will own 51 per cent, Reuters reported in April.

A Ford spokeswoman did not comment directly on the deal, but said the company was engaged with Mahindra to develop avenues of strategic cooperation that help us achieve commercial, manufacturing and business efficiencies.

Ford’s two manufacturing plants – one in Chennai in southern India and the other in Sanand which was inaugurated in 2015 – will be moved to the new joint venture, but Ford will keep the engine plant at Sanand. Together, they have a maximum annual manufacturing capacity of 440,000 vehicles.

The Mahindra deal is an opportunity for Ford to recover some of the money it has invested in India, said one of the sources.

In India, currently, Ford manufactures and sells its cars via its wholly-owned subsidiary. In 2017 it formed a strategic alliance with Mahindra under which, among other things, they will develop new cars together, including SUVs and electric variants.

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