Ford-Mahindra Joint Venture In India Called Off
Modified On Jul 20, 2021 04:18 PM By Dinesh
Both the carmakers signed an agreement in October 2019 to form a JV for the Indian market
- The decision has reportedly been taken due to the changing financial and business conditions brought on by the covid-19 pandemic.
- Ford will continue its India operations as is, but the carmaker is said to be re-evaluating its businesses across the globe, including India.
- Plans for the XUV500-based Ford SUV, as well as Mahindra's 130PS 1.2-litre T-GDi petrol engine for the Ford EcoSport remain unchanged.
- Mahindra says this decision will not impact its production plans.
In October 2019, Ford and Mahindra signed an agreement to create a joint venture that will work towards developing and selling cars in the Indian market. While Ford was supposed to move its entire India operations under the JV, owning 49 percent stake in the venture, Mahindra was to have a controlling 51 percent stake.
Now both the carmakers have mutually agreed to pull the plug on the joint venture. The decision comes after the passing of the December 31 “longstop,” or expiration date of a definitive agreement the organizations entered into in October 2019.
This decision is said to be the result of the changes in the global business and financial conditions due to the covid-19 outbreak globally. Ford says that the virus outbreak has forced both the carmakers to reconsider their capital allocation priorities. Ford also confirmed that it will continue to run its India operations as is but the carmaker is re-evaluating its business across the globe, including India.
Ford currently has only six cars in its portfolio: Figo, Aspire, Freestyle, EcoSport, Endeavour and the Mustang. Mahindra has cleared that calling off the JV will not affect the launch of the Ford mid-size SUV (W605 codenamed), which is based on the upcoming second-gen XUV500 (W601). The new XUV500 will likely hit the market in the first quarter of 2021 and the Ford SUV is expected six to nine months post the XUV500’s launch. Mahindra will also supply its brand new 130PS 1.2-litre T-GDi turbo petrol engine to power the Ford EcoSport soon. These projects are in advanced stages and are part of an agreement which happened before the dissolved joint venture. All other projects like the Marazzo-based Ford MPV and a few others will be reviewed again in the coming months.
Mahindra has also said that this decision will not have any impact on its production plan. So, the carmaker will launch the next-gen Scorpio and the next-gen XUV500 in 2021. Mahindra is also expected to launch its long-range electric cars in India including the XUV300 electric in 2021.
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