The proposed joint venture between Ford and Mahindra in India appears to have ended with the American company electing to continue operations as a standalone.
Ford Motor Company and Mahindra & Mahindra have mutually and amicably determined they will not complete a previously announced automotive joint venture between their respective companies. The decision follows the passing of the December 31 ‘longstop’, or expiration, date of a definitive agreement the organisations entered into in October 2019.
According to the companies, the outcome is driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.
Ford said its independent operations in India would continue as is. The company is actively evaluating its businesses around the world, including in India, making choices and allocating capital in ways that advance Ford’s plan to achieve an 8% company adjusted EBIT margin and generate consistently strong adjusted free cash flow.
Ford’s plan calls for developing and delivering high quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford.
The company is moving quickly to:
- Turn around its automotive business – competing like a challenger while simplifying and modernizing all aspects of the company, and
- Grow by capitalizing on existing strengths, disrupting the conventional automotive business and partnering with others to gain expertise and efficiency.
The automakers had said they would cooperate to develop an electric car for emerging markets and work together to introduce three new models to be sold under the Ford brand in India, starting with a midsize SUV.
Ford did not specify what would become of those projects. Mahindra said in its own statement the venture’s termination would not affect its product plans.
“Mahindra is accelerating its efforts to establish leadership in electric SUVs,” it said.
Jim Farley, who became the US automaker’s chief executive officer in October, said in 2019 the JV with Mahindra could allow Ford to double its revenue from India.