JV with Mahindra: What's the future like for Ford in India
Mahindra and Ford have announced the formation of a new joint venture. This comes amidst the plans by the multinational automobile manufacturer to exit Indian market.
India’s Mahindra and US’s Ford have announced a joint venture, a move that follows the plans of the American multinational company to exit from the Indian market.
Here we will look at how the company is going to be functional through the joint venture.
Value of the Joint Venture:
The JV is approximately valued at $275 million (₹1,925 crores). It will focus on the development, marketing and distribution of Ford’s vehicles in India. The same approach will be followed in the emerging international markets.
Mahindra will own 51 percent of the controlling stake while the remaining 49 per cent will go to Ford. Mahindra will be responsible for operational management and will also produce vehicles on behalf of the company.
It also aims at optimising product development, technological synergies and material sourcing procedures right from the grassroots level.
The venture is likely to produce three new Utility Vehicles (UVs) under the Ford brand and Mahindra's guidance. Both the companies will own their brands and the vehicles will be distributed through their respective independent dealer networks in India.
The manufacturing/assembling plant of Ford in Chennai and Sanand will be transferred to this venture. But, Ford will retain the engine plant operations at Sanand. It will also retain services like Global Business Service entities, Ford Credit and Ford Smart Mobility.
Both companies had started their strategic partnership in September 2017. From then until now, the partnership focused on combining Ford’s global reach and Mahindra’s business model and mass market expertise.